INITIAL DECISION RELEASE NO. 1402

ADMINISTRATIVE PROCEEDING

FILE NOS. 3-17874 and 3-17875

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

In the Matter of : 

: SUPPLEMENTAL INITIAL DECISION

TALMAN HARRIS and : AS TO TALMAN HARRIS

VICTOR ALFAYA : September 2, 2020

APPEARANCES: Dugan Bliss and John O. Enright for the Division of Enforcement,

Securities and Exchange Commission

Talman Harris, pro se

BEFORE: Carol Fox Foelak, Administrative Law Judge

SUMMARY

This Initial Decision bars Talman Harris from the securities industry. He was previously 

enjoined from violating the antifraud provisions of the federal securities laws and convicted of wire 

fraud and conspiracy to commit securities fraud and wire fraud.

I. INTRODUCTION

The Securities and Exchange Commission instituted proceedings against Respondents 

Talman Harris and Victor Alfaya with Orders Instituting Proceedings, pursuant to Section 15(b) of 

the Securities Exchange Act of 1934, on March 10, 2017, and the two proceedings were 

consolidated on March 13, 2017.

1

 The proceeding is a follow-on proceeding based on SEC v. Cope, 

No. 1:14-cv-7575 (S.D.N.Y.), in which Respondents were enjoined from violating the antifraud 

provisions of the federal securities laws and on United States v. Scholander, No. 1:15-cr-335 (N.D. 

Ohio), in which Respondents were convicted of conspiracy to commit securities fraud and wire fraud, 

and Harris was convicted of wire fraud. On October 30, 2017, an Initial Decision imposed 

associational bars on Respondents. Talman Harris, Initial Decision Release No. 1213, 2017 SEC 

LEXIS 3450 (A.L.J.).

 

1

 The proceeding has ended as to Victor Alfaya. See Talman Harris, Initial Decision Release No. 

1381, 2019 SEC LEXIS 1548 (June 28, 2019), finality order sub nom. Victor Alfaya, Exchange Act 

Release No. 87162, 2019 SEC LEXIS 3432 (Sept. 30, 2019). 
2

On August 22, 2018, in light of Lucia v. SEC, 138 S. Ct. 2044 (2018), the Commission 

ordered a new hearing in each pending proceeding, including this one, before an administrative law 

judge (ALJ) who had not previously participated in the proceeding, unless the parties expressly 

agreed to alternative procedures, including agreeing that the proceeding remain with the previous 

presiding ALJ. Pending Admin. Proc., Securities Act of 1933 Release No. 10536, 2018 SEC 

LEXIS 2058, at *2-3 (August 22 Order). Accordingly, the proceeding was reassigned to the 

undersigned. Pending Admin. Proc., Admin. Proc. Rulings Release No. 5955, 2018 SEC LEXIS 

2264 (C.A.L.J. Sept. 12, 2018). Thereafter, the parties filed motions for summary disposition. See 

Talman Harris, Admin. Proc. Rulings Release No. 6531, 2019 SEC LEXIS 694 (A.L.J. Apr. 1, 

2019). 

A June 28, 2019, Initial Decision, based on the parties’ motions for summary disposition,2

barred Harris from the securities industry. Talman Harris, Initial Decision Release No. 1380, 2019 

SEC LEXIS 1547. The Commission vacated that Initial Decision and remanded the proceeding. 

Talman Harris, Exchange Act Release No. 87425, 2019 SEC LEXIS 4280 (Oct. 30, 2019). The 

Commission found that the Initial Decision “stated only that Harris had been enjoined and 

convicted [and] did not describe Harris’s underlying conduct” and remanded the proceeding to the 

undersigned “to identify the facts and circumstances of Harris’s misconduct that lead her to 

conclude that the public interest warrants the imposition of sanctions.” Id., at *3. There were no 

findings of fact in either of the cases on which this proceeding is based. In the criminal case the 

jury returned a general verdict on each count, and in the civil case the court entered judgment on 

default. In view thereof, the parties were “invited to supplement their [previous] motions for 

summary disposition, with additional arguments and/or additional reference to ‘undisputed pleaded 

facts, declarations, affidavits, documentary evidence or facts officially noticed pursuant to Rule 

323.’” Talman Harris, Admin. Proc. Rulings Release No. 6730, 2020 SEC LEXIS 3256, at *2

(Feb. 5, 2020) (quoting 17 C.F.R. § 201.250(b)). The Division affirmatively declined in its March 

4, 2020, filing titled “Notice of Resting on Prior Briefing.” Harris did not submit anything. A letter 

dated March 9, 2020, from TheBlot magazine editorial board was submitted in support of Harris. 

The Division replied to the letter in a letter dated March 27, 2020. 

II. PROCEDURAL ISSUES

A. Official Notice

Official notice pursuant to 17 C.F.R. § 201.323 is taken of the Commission’s public official 

records and of the docket reports and courts’ orders and transcripts of testimony in SEC v. Cope and 

United States v. Scholander, and from Financial Industry Regulatory Authority, Inc. (FINRA), 

records as well. See Joseph S. Amundsen, Exchange Act Release No. 69406, 2013 SEC LEXIS 

1148, at *1 n.1 (Apr. 18, 2013), pet. denied, 575 F. App’x 1 (D.C. Cir. 2014).

 

2

 Harris’s only filing in that phase of the proceeding was a submission dated October 9, 2018, in 

which he “den[ied] all of the charges in this civil matter” and proposed dismissal by summary 

disposition in accordance with 17 C.F.R. § 201.250. He also stated that he was not afforded an 

attorney. However, a respondent in an administrative proceeding does not have a right to a 

government-appointed attorney. See Boruski v. SEC, 340 F.2d 991, 992 (2d Cir. 1965); V.F. Minton 

Sec., Inc., Exchange Act Release No. 32074, 1993 SEC LEXIS 642, at *18 (Mar. 31, 1993), pet. 

denied, 18 F.3d 937 (5th Cir. 1994) (unpublished table decision). 
3

B. Collateral Estoppel

Harris is estopped from relitigating SEC v. Cope and United States v. Scholander in this 

proceeding. It is well established that the Commission does not permit criminal convictions or civil 

injunctions to be collaterally attacked in its administrative proceedings. See Ira William Scott, 

Investment Advisers Act of 1940 Release No. 1752, 1998 SEC LEXIS 1957, at *8-9 (Sept. 15, 

1998); William F. Lincoln, Exchange Act Release No. 39629, 1998 SEC LEXIS 193, at *7-8 (Feb. 

12, 1998) (criminal convictions); see also Joseph P. Galluzzi, Exchange Act Release No. 46405, 

2002 SEC LEXIS 3423, at *11 n.21 (Aug. 23, 2002); Charles Phillip Elliott, Exchange Act Release 

No. 31202, 1992 SEC LEXIS 2334, at *10 (Sept. 17, 1992); John Francis D’Acquisto, Advisers Act 

Release No. 1696, 1998 SEC LEXIS 91, at *7 (Jan. 21, 1998); James E. Franklin, Exchange Act 

Release No. 56649, 2007 SEC LEXIS 2420, at *11 & nn.13-14 (Oct. 12, 2007), pet. denied, 285 F. 

App’x 761 (D.C. Cir. 2008); Demitrios Julius Shiva, Exchange Act Release No. 38389, 1997 SEC 

LEXIS 561, at *5-6 & nn.6-7 (Mar. 12, 1997) (civil proceedings) (injunctions). Nor does the 

pendency of an appeal preclude the Commission from follow-on administrative proceedings. See 

Joseph P. Galluzzi, 2002 SEC LEXIS 3423, at *10 n.21; Charles Phillip Elliott, 1992 SEC LEXIS 

2334, at *11.

TheBlot’s letter attacks the criminal and civil cases on which this proceeding is based as well 

as a FINRA proceeding against Harris based on an unrelated fact situation. The letter states that 

Harris is Black, and that FINRA orchestrated the campaign against him, based on lies, for racist 

reasons. The letter also incorrectly states that Harris’s conviction was overturned by the U.S. Court 

of Appeals for the Sixth Circuit. 

The Court of Appeals reversed the conviction on one count (obstruction of justice) and 

remanded for a retrial on that count or resentencing on the remaining four counts, at the government’s 

option; remanded for a hearing pursuant to Remmer v. United States, 347 U.S. 227 (1954), as to 

whether Harris was prejudiced by jury misconduct (extraneous influence on one juror); and affirmed 

the convictions on the remaining counts, except that, if following a Remmer hearing, the district court 

found that Harris was prejudiced by juror misconduct, he would be entitled to a new trial on all counts. 

United States v. Harris, 881 F.3d 945 (6th Cir. 2018). Following the August 2, 2018, Remmer hearing, 

the court found no basis for a new trial, and Harris was resentenced on January 17, 2019. United States 

v. Scholander, 2018 U.S. Dist. LEXIS 138064 (Aug. 15, 2018), ECF No. 364; Order Denying Motion 

for New Trial Pursuant to Rule 33 (Oct. 24, 2018), ECF No. 377; Order Denying Motion for 

Reconsideration (Nov. 20, 2018), ECF No. 385; Amended Judgment in a Criminal Case (Jan. 25, 

2019), ECF No. 398, appeal dismissed sub nom. United States v. Harris, No. 19-3088 (6th Cir. Feb. 

11, 2019), ECF No. 5 (granting Harris’s motion to dismiss his appeal).

III. FINDINGS OF FACT

Harris was convicted of conspiracy to commit securities fraud and wire fraud, in violation of 18 

U.S.C. § 1349, and wire fraud, in violation of 18 U.S.C. § 1343. Amended Judgment in a Criminal 

Case, United States v. Scholander (Jan. 25, 2019), ECF No. 398,3 appeal dismissed sub nom. United 

 

3

 The amended criminal judgment reflected his resentencing as ordered in United States v. Harris, 

881 F.3d 945 (6th Cir. 2018). 
4

States v. Harris, No. 19-3088 (6th Cir. Feb. 11, 2019), ECF No. 5 (granting Harris’s motion to 

dismiss his appeal). He was sentenced to thirty-seven months of imprisonment followed by five 

years of supervised release and ordered to pay, jointly and severally with other defendants,

restitution of $843,423.91. He was enjoined, by default, against violations of the antifraud 

provisions of the federal securities laws, Section 10(b) of the Exchange Act and Rule 10b-5 

thereunder and Section 17(a) of the Securities Act of 1933, and barred from participating in an 

offering of penny stock; he was also ordered to pay disgorgement of $775,104 plus prejudgment 

interest of $201,984.17 and a civil penalty of $1,000,000. Final Judgment as to Defendants Talman 

Harris and Victor Alfaya, SEC v. Cope (Feb. 7, 2017), ECF No. 294.

In the criminal case, Harris was convicted after a jury found him guilty of one count of 

conspiracy, occurring between 2006 and 2014, to commit securities fraud, 18 U.S.C. § 1348, and wire 

fraud, 18 U.S.C. § 1343, in violation of 18 U.S.C. § 1349; and three counts of wire fraud, occurring in 

2010, 2011, and 2012, in violation of 18 U.S.C. § 1343. Superseding Indictment, United States v. 

Scholander,ECF No. 155 at 12-28; Jury Verdict Forms, ECF No. 223 at 1-4. 

According to the Commission’s official records and FINRA records, Harris was associated 

with several registered broker-dealers between 1999 and 2015 (some of which FINRA expelled on 

various dates between 2001 and 2018).4 FINRA barred him from association with a broker-dealer 

in any capacity; the sanction was upheld on appeal. William Scholander, Exchange Act Release 

No. 77492, 2016 SEC LEXIS 1209 (Mar. 31, 2016), pet. denied sub. nom. Harris v. SEC, 712 F. 

App’x 46 (2d Cir. 2017). In denying Harris’s petition for review of the Commission’s decision 

sustaining FINRA’s sanction, the court noted that FINRA: (1) found that Harris and his business 

partner violated Exchange Act Section 10(b), and FINRA Rules 2010 and 2020, by recommending 

that customers purchase certain securities without disclosing that they had received a $350,000 

“advisory fee” from the issuer two months earlier; and (2) barred him in light of the violations and 

several aggravating factors. Harris, 712 F. App’x at 47. The court also noted the Commission 

decision’s consideration of the aggravating factors, including Harris’s providing inaccurate or 

misleading information and testimony to FINRA investigators. Id. at 49. Harris did not contest the 

finding that he testified falsely. Id. 

The fact situation underlying SEC v. Cope and United States v. Scholander was a scheme 

controlled by Izak Zirk de Maison f/k/a Izak Zirk Engelbrecht (Zirk de Maison). The scheme involved 

price manipulation, inappropriate removal of restrictive legends, and matched trades of shares of thinly 

traded penny stocks that Zirk de Maison had obtained. The final step in the scheme was for Zirk de 

Maison’s shares to be sold to a customer of a cooperating registered representative who would receive 

an enormous commission that was not disclosed to the customer. For example, between about 

February 2008 and June 2011, Zirk de Maison arranged for Harris and his partner William Scholander 

to buy shares in Lenco Mobile Inc. for their customers and paid them commissions of 30%-50%. Div. 

Mot. for Summ. Disp., Ex. 4 at 2. 

Harris’s criminal trial in United States v. Scholander took place over ten days between August 

23 and September 7, 2016. Trial Tr., United States v. Scholander, ECF Nos. 317-26. The 

government called twelve witnesses – two FBI agents; an attorney with FINRA’s Criminal 

 

4 See Talman Anthony Harris BrokerCheck Report, available at http://brokercheck.finra.org (last 

visited August 31, 2020). 
5

Prosecution Assistance Group; Zirk de Maison and three other participants in the scheme, including 

Harris’s partner Scholander; Zirk de Maison’s administrative assistant; and four customers. Id. 

Harris called one witness, customer Daniel Finn. Trial Tr. 1479, ECF No. 325. 

Harris’s cross-examination of the four participants who testified for the government – Zirk 

de Maison and stockbrokers Gregory Goldstein, Guy Durand, and Scholander – highlighted the 

effect that their testimony might have on their criminal liability, suggesting that they might recount 

facts in the light most unfavorable to the defendant. Durand, who admitted that he took payments 

from Zirk de Maison that were not disclosed to customers, was interviewed several times by the FBI 

but was never charged and made no agreements. Trial Tr. 917-18, 925-26, 937, 941, ECF No. 322. 

The remaining three – who had pleaded guilty pursuant to cooperation agreements that offered the 

possibility of reduced sentences – were awaiting sentencing by the same judge who was presiding at 

Harris’s trial.5 Trial Tr. 366-72, 697-99, 1200-06, ECF Nos. 319, 321, 323. Additionally, 

Scholander testified that between the September 9, 2015, date of his arrest and his first meeting with 

the government he had learned that Harris had received considerably more money than he from Zirk 

de Maison, despite their agreement to split the payments 50/50. Trial Tr. 1228-29, ECF No. 323. 

To consider the record in United States v. Scholander in the light most favorable to Harris in this 

proceeding, the undersigned has disregarded the testimony of these witnesses except to the extent 

necessary to support the elements of the offenses of conviction. The undersigned has, however,

considered the testimony of the sole witness called by Harris. 

As noted above, the jury convicted Harris on two types of criminal counts. First, to convict 

Harris of conspiracy to commit securities fraud or wire fraud, the jury was required to find beyond a 

reasonable doubt that two or more people conspired, or agreed, to commit securities or wire fraud and 

that Harris knowingly and voluntarily joined the conspiracy. See 18 U.S.C. § 1349; United States v. 

Rogers, 769 F.3d 372, 377 (6th Cir. 2014); Trial Tr. 1535, 1545, 1553, 1556 (jury instructions), ECF 

No. 325.6 The jury must therefore have found that there was some agreement to carry out the alleged 

scheme, and that Harris knowingly and voluntarily agreed to participate in the scheme. Trial Tr. 1545-

 

5

 Scholander was sentenced on January 30, 2017, to twenty months of imprisonment followed by 

five years of supervised release and ordered to pay, jointly and severally with Harris and Zirk de 

Maison, restitution of $843,423.91. Judgment in a Criminal Case, United States v. Scholander, ECF 

No. 298. Goldstein was sentenced on February 1, 2017, to thirty-three months of imprisonment 

followed by five years of supervised release and ordered to pay, jointly and severally with other 

defendants, restitution of $6,307,693.53. Judgment in a Criminal Case, United States v. Goldstein, 

No. 1:15-cr-328 (N.D. Ohio), ECF No. 29. Zirk de Maison was sentenced on February 1, 2017, to 

151 months of imprisonment followed by five years of supervised release and ordered to pay, 

jointly and severally with other defendants, restitution of $39,105,515.63. United States v. De 

Maison, No. 1:15-cr-117 (N.D. Ohio), ECF No. 85. Originally from South Africa, he had been 

incarcerated as a flight risk since the September 18, 2014, date of his arrest and expected to be 

deported eventually. Order of Detention, United States v. De Maison, No. 5:14-mj-382 (C.D. Calif. 

Sept. 19, 2014), ECF No. 9; Trial Tr. 404, 766-67, United States v. Scholander, ECF Nos. 319, 322. 

6

 It is presumed that juries follow the court’s instructions. See CSX Transp., Inc. v. Hensley, 556 

U.S. 838, 841 (2009) (per curiam). “In the case of a criminal conviction based on a jury verdict of 

guilty, issues which were essential to the verdict must be regarded as having been determined by the 

judgment.” United States v. Fabric Garment Co., 366 F.2d 530, 534 (2d Cir. 1966), quoted in Eric 

S. Butler, Exchange Act Release No. 65204, 2011 SEC LEXIS 3002, at *14 n.23 (Aug. 26, 2011).
6

63 (jury instructions), ECF No. 325. Second, to convict Harris of wire fraud, the jury was required to 

find beyond a reasonable doubt that (1) Harris knowingly participated in, devised, or intended to devise 

a scheme to defraud in order to obtain money or property – that is, to defraud investors; (2) the scheme 

included a material misrepresentation or concealment of a material fact; (3) Harris had intended to 

defraud; and (4) Harris used relevant jurisdictional means in furtherance of the scheme. See 18 U.S.C. 

§ 1343; United States v. Faulkenberry, 614 F.3d 573, 580-81 (6th Cir. 2010); Trial Tr. 1561, 1565 

(jury instructions), ECF No. 325. The three wire fraud counts were each tied to a specific wire 

communication, respectively, on or about November 19, 2010, July 16, 20111, and April 14, 2012 –

which the jury necessarily found occurred, as it was instructed to consider each count separately. See

Superseding Indictment, United States v. Scholander, ECF No. 155 at 28; Trial Tr. 1563-65 (jury 

instructions), ECF No. 325.

Harris’s witness, his customer Daniel Finn, was first cold-called by Harris in 2006 or 2007 and 

invested a relatively modest sum with him about a year later. Trial Tr. 1480-81, 1501-02, ECF No. 

325. He eventually invested much more. Trial Tr. 1481. At the time, he was unaware of the 30%-

50% commissions, which Harris never disclosed to him. Trial Tr. 1482, 1507-08. It made no 

difference to him; he was only concerned with his own return on the investment. Trial Tr. 1482, 1489, 

1506. He bought Lenco as recommended by Harris, eventually sold it after analyzing its business 

model, and lost a substantial sum on the investment. Trial Tr. 1486-88, 1505. He did not blame Harris 

for the loss. Trial Tr. 1488-89. He was friendly with Harris, who visited with him at his residence in 

Ireland, and whom he visited in New York. Trial Tr. 1502-05. 

 

IV. CONCLUSIONS OF LAW

 

Harris has been permanently enjoined “from engaging in or continuing any conduct or 

practice in connection with . . . the purchase or sale of any security” within the meaning of Sections 

15(b)(4)(C) and 15(b)(6)(A)(iii) of the Exchange Act and has been convicted within ten years of the 

commencement of this proceeding of a felony that “involves the purchase or sale of any security” 

and that “arises out of the conduct of the business of a broker [or] dealer” within the meaning of 

Sections 15(b)(4)(B)(i), (ii), (iv) and 15(b)(6)(A)(ii) of the Exchange Act. The misconduct 

underlying the criminal and civil cases occurred while Harris was associated with a registered 

broker-dealer.

V. SANCTION

A collateral bar will be ordered.

7

 

A. Sanction Considerations

The Commission determines sanctions pursuant to a public interest standard. See 15 U.S.C. 

§ 78o(b)(6). The Commission considers factors including:

 

7 The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which became 

effective on July 22, 2010, provided collateral bars in each of the several statutes regulating 

different aspects of the securities industry. At least some of the conduct that led to the cases against

Harris occurred after July 22, 2010. See Bartko v. SEC, 845 F.3d 1217 (D.C. Cir. 2017) (holding 

that a collateral bar cannot be imposed when the violative conduct on which a follow-on proceeding 

was based ended before the July 22, 2010, effective date of the Dodd-Frank Act). 
7

the egregiousness of the defendant’s actions, the isolated or recurrent nature of the 

infraction, the degree of scienter involved, the sincerity of the defendant’s assurances 

against future violations, the defendant’s recognition of the wrongful nature of his 

conduct, and the likelihood that the defendant’s occupation will present opportunities 

for future violations.

Steadman v. SEC, 603 F.2d 1126, 1140 (5th Cir. 1979) (quoting SEC v. Blatt, 583 F.2d 1325, 1334 

n.29 (5th Cir. 1978)), aff’d on other grounds, 450 U.S. 91 (1981). The Commission also considers 

the age of the violation and the degree of harm to investors and the marketplace resulting from the 

violation. Marshall E. Melton, Exchange Act Release No. 48228, 2003 SEC LEXIS 1767, at *5

(July 25, 2003). Additionally, the Commission considers the extent to which the sanction will have 

a deterrent effect. Schield Mgmt. Co., Exchange Act Release No. 53201, 2006 SEC LEXIS 195, at 

*35 & n.46 (Jan. 31, 2006). The public interest requires a severe sanction when a respondent’s past 

misconduct involves fraud because opportunities for dishonesty recur constantly in the securities 

business. See Vladimir Boris Bugarski, Exchange Act Release No. 66842, 2012 SEC LEXIS 1267, 

at *18 n.26 (Apr. 20, 2012); Richard C. Spangler, Inc., Exchange Act Release No. 12104, 1976 

SEC LEXIS 2418, at *34 (Feb. 12, 1976). 

B. Sanction

As described in the Findings of Fact, Harris’s conduct was egregious and recurrent, over a 

period of several years between at least 2008 and 2012, and involved a high degree of scienter as 

indicated by the fact that his misconduct included wire fraud and conspiracy to commit securities 

fraud and wire fraud. His conduct during that time included his participation in Zirk de Maison’s 

arrangement for Harris and his partner to buy shares in Lenco for their customers and in return for

commissions of 30%-50%. A specific example of his conduct was omitting to disclose to customer 

Daniel Finn that he and his partner would receive a 30%-50% commission on Finn’s purchase of 

Lenco on his recommendation. This omission – to disclose an enormous commission that would 

affect the stockbroker’s desire to recommend the stock as well as the price charged to the customer 

– was an omission to disclose a material fact. Even if the omission made no difference to Finn, as 

he testified, the standard of materiality is whether or not a reasonable investor or prospective 

investor would have considered the information important in making an investment decision. See 

Basic Inc. v. Levinson, 485 U.S. 224, 231-32, 240 (1988); TSC Indus., Inc. v. Northway, Inc., 426 

U.S. 438, 449 (1976). “[T]here must be a substantial likelihood that the disclosure of the omitted 

fact would have been viewed by the reasonable investor as having significantly altered the ‘total 

mix’ of information made available.” Basic Inc., 485 U.S. at 231-32 (quoting TSC Indus., Inc., 426 

U.S. at 449); accord Matrixx Initiatives, Inc. v. Siracusano, 563 U.S. 27, 38 (2011); SEC v. 

Steadman, 967 F.2d 636, 643 (D.C. Cir. 1992).8 

 

8

Investor sophistication may influence whether an allegedly misleading or omitted fact would have 

assumed actual significance in the deliberations of the reasonable investor. See McGonigle v. 

Combs, 968 F.2d 810, 817 (9th Cir. 1992). Moreover, investor sophistication is a relevant 

consideration in assessing the adequacy of a defendant’s disclosure. United States v. Litvak , 808 

F.3d 160, 185 (2d Cir. 2015). Nonetheless, while Finn was able to analyze Lenco’s business and 

eventually decide it was a poor investment, his lack of concern over the commission showed an 

unawareness as to its economic effect on the return on his investment, his stated sole concern.

 
8

Harris’s occupation, which included fifteen years as a registered representative associated 

with broker-dealers, if he were allowed to continue it in the future, would present opportunities for 

future violations. Absent a bar, he could engage in fraud in the securities industry. The violations 

are relatively recent. Consistent with a vigorous defense of the charges in the proceedings brought 

against him, Harris has not otherwise recognized the wrongful nature of his conduct or made 

assurances against future violations. The $843,423.91 that he and others were ordered to pay in 

restitution and the disgorgement of $775,104 that he was ordered to pay are measures of the direct 

harm to the marketplace. Further, as the Commission has often emphasized, the public interest 

determination extends beyond consideration of the particular investors affected by a respondent’s 

conduct to the public-at-large, the welfare of investors as a class, and standards of conduct in the 

securities business generally. See Christopher A. Lowry, Investment Company Act of 1940 Release 

No. 2052, 2002 SEC LEXIS 2346, at *20 (Aug. 30, 2002), aff’d, 340 F.3d 501 (8th Cir. 2003); Arthur 

Lipper Corp., Exchange Act Release No. 11773, 1975 SEC LEXIS 527, at *52 (Oct. 24, 1975). An

injunction involving dishonesty requires a bar, and because of the Commission’s obligation to 

maintain honest securities markets, an industry-wide bar is appropriate. 

The Commission considers fraud to be especially serious and to subject a respondent to the 

severest of sanctions. Marshall E. Melton, 2003 SEC LEXIS 1767, at *29-30. Indeed, from 1995 

to the present, there have been over fifty litigated follow-on proceedings based on antifraud 

injunctions or convictions in which the Commission issued opinions, and all of the respondents 

were barred9 – at least fifty unqualified bars and three bars with the right to reapply after five 

years.10 Further, in every such case that followed the statutory provision of collateral bars, the

Commission imposed a collateral bar rather than an industry-specific bar, reasoning that the 

antifraud provisions of the securities laws apply broadly to all securities-related professionals and 

violations demonstrate unfitness for future participation in the securities industry, even if the 

disqualifying conduct is not related to the professional capacity in which the respondent was acting 

when he or she engaged in the misconduct underlying the proceeding. See John W. Lawton, 

Advisers Act Release No. 3513, 2012 SEC LEXIS 3855, at *42-43 (Dec. 13, 2012), vacated in part 

on other grounds, Advisers Act Release No. 4402, 2016 SEC LEXIS 1926 (May 27, 2016). 

Lastly, Harris’s disciplinary history, including his false testimony to FINRA investigators, 

while not a predicate for this proceeding, is an aggravating factor that supports an industry-wide 

bar. See Ross Mandell, Exchange Act Release No. 71688, 2014 SEC LEXIS 849, at *23 (Mar. 7, 

2014) (“Mandell’s disciplinary history is an aggravating factor that strongly weighs in favor of an 

 

9

In the cases authorized before the effective date of the Dodd-Frank Act, which authorized 

collateral bars, the Commission imposed industry-specific bars, such as a bar from association with 

an investment adviser on a respondent who had been associated with an investment adviser at the 

time of his violation. 

10 Those three were Richard J. Puccio, Exchange Act Release No. 37849, 1996 SEC LEXIS 2987 

(Oct. 22, 1996), Martin B. Sloate, Exchange Act Release No. 38373, 1997 SEC LEXIS 524 (Mar. 7, 

1997), and Robert Radano, Advisers Act Release No. 2750, 2008 SEC LEXIS 1504 (June 30, 

2008). The Commission’s opinions do not make clear the factors that distinguished these cases 

from those in which unqualified bars were imposed, but there is little difference between a “bar” 

and a “bar with the right to reapply in five years.” 

 
9

industry-wide collateral bar.”), vacated in part on other grounds, Exchange Act Release No. 77935, 

2016 SEC LEXIS 1886 (May 26, 2016); Johnny Clifton, Exchange Act Release No. 69982, 2013 

SEC LEXIS 2022, at *56 & n.97 (July 12, 2013) (considering, as an aggravating factor in 

determining whether to impose a bar, the respondent’s admissions about the conduct underlying his 

settlement of a FINRA disciplinary action); cf. Lawton, 2012 SEC LEXIS 3855, at *46 

(“Regulatory efforts to detect violative conduct require full cooperation by persons associated with 

each of the professions covered by the collateral bar. Persons who fail to cooperate with such 

efforts may be deemed ‘presumptively unfit for employment in the securities industry’ because such 

non-cooperation ‘frustrates . . . efforts to detect misconduct, and such inability in turn threatens 

investors and markets.’” (omission in original)).

VI. ORDER

IT IS ORDERED that, pursuant to Section 15(b) of the Securities Exchange Act of 1934

TALMAN HARRIS IS BARRED from associating with any broker, dealer, investment adviser, 

municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical 

rating organization and from participating in an offering of penny stock.11

This Initial Decision shall become effective in accordance with and subject to the provisions 

of Rule 360 of the Commission’s Rules of Practice, 17 C.F.R. § 201.360. Pursuant to that Rule, a 

party may file a petition for review of this Initial Decision within twenty-one days after service of 

the Initial Decision. A party may also file a motion to correct a manifest error of fact within ten 

days of the Initial Decision, pursuant to Rule 111 of the Commission’s Rules of Practice, 17 C.F.R. 

§ 201.111. If a motion to correct a manifest error of fact is filed by a party, then a party shall have 

twenty-one days to file a petition for review from the date of the undersigned’s order resolving such 

motion to correct a manifest error of fact. The Initial Decision will not become final until the 

Commission enters an order of finality. The Commission will enter an order of finality unless a 

party files a petition for review or a motion to correct a manifest error of fact or the Commission 

determines on its own initiative to review the Initial Decision as to a party. If any of these events 

occur, the Initial Decision shall not become final as to that party.

/S/ Carol Fox Foelak 

Carol Fox Foelak

Administrative Law Judge

 

11 Thus, Harris will be barred from acting as promoter, finder, consultant, or agent; or otherwise 

engaging in activities with a broker, dealer, or issuer for purposes of the issuance or trading in any 

penny stock, or inducing or attempting to induce the purchase or sale of any penny stock, pursuant 

to Exchange Act Section 15(b)(6)(A), (C).