Initial Decision Release No. 1349

Administrative Proceeding

File No. 3-17888

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

In the Matter of

William D. Bucci

Initial Decision of Default

February 12, 2019

Appearances: Christopher R. Kelly for the Division of Enforcement,

Securities and Exchange Commission

Before: James E. Grimes, Administrative Law Judge

Summary

I grant the Division of Enforcement’s motion for default and sanctions. 

Respondent William D. Bucci is barred from associating with a 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.

Procedural Background

The Securities and Exchange Commission initiated this proceeding in 

March 2017, when it issued an order instituting proceedings (OIP) under 

Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the 

Investment Advisers Act of 1940.

1 This is a follow-on proceeding based on 

Bucci’s June 2016 guilty plea in the United States District Court for the 

Eastern District of Pennsylvania.

2

 

1 OIP at 1; see 15 U.S.C. §§ 78o(b), 80b-3(f).

2 See United States v. Bucci, No. 2:14-cr-191 (E.D. Pa.).
2

A different administrative law judge originally presided over this 

proceeding and issued an initial decision of default.3 But the Commission 

vacated that decision following the Supreme Court’s decision in Lucia v. 

SEC,

4 and the matter was reassigned to me to provide Bucci with the 

opportunity for a new hearing.5 Bucci was directed to propose how further 

proceedings should be conducted,6 but he never submitted a proposal or filed 

an answer.7 Thereafter, I found that Bucci had been served with the OIP and 

ordered him to show cause why the proceeding should not be determined 

against him due to his failure to answer the OIP or otherwise defend the 

proceeding.8

After Bucci failed to respond to the order to show cause or participate in 

a prehearing conference,9 the Division filed a motion for default and 

sanctions, supported by a declaration and five exhibits.

10 In conducting this 

proceeding and considering the Division’s motion, I have given no weight to 

the opinions, orders, or rulings issued by the prior administrative law 

judge.11

 

3 William D. Bucci, Initial Decision Release No. 1144, 2017 WL 2572436

(ALJ June 14, 2017).

4 138 S. Ct. 2044 (2018); see Pending Admin. Proc., Securities Act of 1933 

Release No. 10536, 2018 WL 4003609, at *1 (Aug. 22, 2018).

5 Pending Admin. Proc., Admin. Proc. Rulings Release No. 5955, 2018 SEC 

LEXIS 2264, at *2–3 (ALJ Sept. 12, 2018).

6 William D. Bucci, Admin. Proc. Rulings Release No. 5979, 2018 SEC 

LEXIS 2322, at *1 (ALJ Sept. 14, 2018).

7 William D. Bucci, Admin. Proc. Rulings Release No. 6225, 2018 SEC 

LEXIS 2895, at *1 (ALJ Oct. 18, 2018).

8 Id. at *1–2.

9 William D. Bucci, Admin. Proc. Rulings Release No. 6317, 2018 SEC 

LEXIS 3189, at *1 (ALJ Nov. 9, 2018).

10 The exhibits are cited as “Div. Ex. _” using the documents’ internal 

pagination.

11 See Pending Admin. Proc., 2018 WL 4003609, at *1.
3

Findings of Fact

The findings and conclusions in this initial decision are based on the 

record and on facts officially noticed.12 Because Bucci is in default, I have

deemed true the allegations in the OIP and, consistent with Commission 

precedent, will rely on those allegations in conjunction with other evidence in 

the record developed since the proceeding was reassigned to me.

13 That other 

evidence includes the facts admitted when Bucci pleaded guilty in the 

criminal action that serves as the basis for this proceeding,

14 and the facts 

found by the district court during sentencing.15 In making the findings below, 

I have applied preponderance of the evidence as the standard of proof.16

For at least a decade Bucci was an active participant in the securities 

industry. He was a registered representative of Ryan Beck & Company from 

April 2002 through April 2007, of Oppenheimer & Company from April 2007 

through August 2011, and of Financial Network Investment Corporation 

from August 2011 through May 2012.17 All three companies were registered 

with the Commission as broker-dealers and investment advisers when Bucci 

 

12 17 C.F.R. § 201.323. 

13 See Pending Admin. Proc., 2018 WL 4003609, at *1; see also 17 C.F.R. 

§ 201.155(a); David E. Lynch, Exchange Act Release No. 46439, 2002 WL 

1997953, at *1 & n.12 (Aug. 30, 2002) (instructing that, “if additional 

evidence is adduced in a proceeding against a respondent” who is in default, 

“the decisionmaker properly should consider that evidence in the 

determination of the proceeding”).

14 In pleading guilty, Bucci stipulated to certain facts specified in a written 

plea memorandum and supplemented by his counsel during the plea colloquy.

See Div. Exs. 1, 2. I therefore rely on those facts rather than the facts alleged 

in the second superseding indictment. See, e.g., United States v. White, 408 

F.3d 399, 402–03 (8th Cir. 2005) (finding that a defendant’s guilty plea did 

not constitute an admission to facts that the defendant disavowed during his 

plea hearing); Valansi v. Ashcroft, 278 F.3d 203, 216 n.10 (3d Cir. 2002) 

(recognizing that a defendant “may . . . plead guilty to only one of the 

allegations required to prove an element of her crime”).

15 See Div. Ex. 5.

16 See John Francis D’Acquisto, Advisers Act Release No. 1696, 1998 WL 

34300389, at *2 (Jan. 21, 1998).

17 OIP at 1–2.
4

was associated with them.18 And for most of that time, Bucci was operating a 

patchwork scheme to defraud his clients, friends, and family.19

From 2004 through 2011, Bucci promised prospective investors that they 

would earn “as much as 10% annual interest” with return of principal within 

two or three years.20 But instead of investing his investors’ money in real 

estate or an olive oil and wine business as promised, Bucci used it to pay 

principal and interest on his substantial preexisting indebtedness.21 He did 

not disclose these debts to his investors before they invested.22 And even 

when pressed for financial records by disgruntled investors, he disclosed only 

his debts to financial institutions, omitting his substantial debts to personal 

lenders.23 He continued to promise repayment even when he “had little 

reasonable expectation that he would be able to repay outstanding debts.”24

Bucci later acknowledged that the information that he concealed from 

prospective investors was material to their decision to invest.25

On June 8, 2016, Bucci pleaded guilty to one count of securities fraud in 

violation of Exchange Act Section 10(b) and Rule 10b-5, four counts of mail 

fraud, and one count of mortgage fraud.

26 He stipulated to facts sufficient to 

establish the elements of those offenses, including using a device or scheme to 

defraud in connection with the purchase or sale of a security.

27 He also 

pleaded nolo contendere to five counts of submitting a false tax return.

28

 

18 Id.

19 Div. Ex. 1 at 1.

20 Id. at 1–2

21 Id. at 1; Div. Ex. 2 at 48.

22 Div. Ex. 1 at 1–2

23 Id. at 2.

24 Id. 

25 Id.

26 OIP at 2; Div. Ex. 1 at 1–2; see 15 U.S.C. §§ 78j(b); 18 U.S.C. §§ 1014, 

1341; 17 C.F.R. § 240.10b-5.

27 Div. Exs. 1 at 2; 2 at 31–32, 43, 48–49. 

28 OIP at 2; Div. Ex. 1 at 1; see 26 U.S.C. § 7206(1).
5

The district court sentenced Bucci to seventy-eight months’

imprisonment and ordered him to pay $3,011,951.24 in restitution to the 

Internal Revenue Service and twenty-one identified victims.29 During the 

sentencing hearing, the court found that “Mr. Bucci has not truthfully 

admitted the conduct for which he is accountable” or “accept[ed] 

responsibility,” and it was “not convinced that Mr. Bucci understands the full 

magnitude of what he’s done.”30 The court further criticized Bucci for 

“attempt[ing] to minimize, to some extent,” the number of people injured by 

his scheme.31

Conclusions of Law

Under the Exchange Act, the Commission may impose collateral and 

penny stock bars32 against Bucci if, as is relevant here, (1) he was associated 

with or seeking to become associated with a broker or dealer at the time of 

his misconduct; (2) he was convicted within ten years before the issuance of 

the OIP of an offense “involv[ing] the purchase or sale of any security”; and 

(3) imposing a bar is in the public interest.33 The Advisers Act gives the 

 

29 Div. Ex. 4 at 2, 5–7.

30 Div. Ex. 5 at 93–94, 141.

31 Id. at 141.

32 A collateral bar, also referred to as an industry bar, is a bar that 

prevents an individual from participating in the securities industry in 

capacities in addition to those in which the person was participating at the 

time of his or her misconduct. See Toby G. Scammell, Advisers Act Release 

No. 3961, 2014 WL 5493265, at *1 & n.1 (Oct. 29, 2014).

33 15 U.S.C. § 78o(b)(4)(B)(i), (6)(A)(ii). Although Bucci’s misconduct began 

before Congress conferred the authority to impose a collateral bar in the 

Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 

No. 111-203, 124 Stat. 1376 (2010), he continued to sell securities as part of 

an ongoing fraudulent scheme for over a year after collateral bars were 

authorized. See Bartko v. SEC, 845 F.3d 1217, 1220–21, 1224 (D.C. Cir. 2017)

(holding that a collateral bar cannot be imposed for wrongdoing committed 

before July 22, 2010, the effective date of Dodd-Frank); Div. Ex. 1 at 1

(admitting that the scheme continued “through 2011”).
6

Commission similar authority with respect to a person associated with or 

seeking to be associated with an investment adviser.

34

The first two requirements are satisfied. During the entire duration of 

Bucci’s fraudulent scheme, he was a registered representative of a series of 

three companies that were dually registered as broker-dealers and 

investment advisers.35 And, in 2016, Bucci pleaded guilty to securities fraud 

based on that same scheme.36

The third requirement—the public’s interest—is also satisfied. In 

making that determination, I have considered the factors discussed in 

Steadman v. SEC37: 

the egregiousness of the respondent’s actions, the 

isolated or recurrent nature of the infraction, the degree 

of scienter involved, the sincerity of the respondent’s 

assurances against future violations, the respondent’s 

recognition of the wrongful nature of his conduct, and 

the likelihood that the respondent’s occupation will 

present opportunities for future violations.38

I have also considered the deterrent effect of administrative sanctions.39 This

public interest inquiry is “flexible, and no one factor is dispositive.”40

 

34 15 U.S.C. § 80b-3(e)(4), (f). The Advisers Act does not authorize 

imposition of a penny stock bar.

35 Compare OIP at 1–2, with Div. Ex. 1 at 1; Div. Ex. 2 at 43.

36 OIP at 2; Div. Exs. 1 at 1–2, 4 at 1. Bucci also pleaded guilty to four 

counts of mail fraud in 2016—an additional and independent basis for finding 

the second requirement satisfied. See OIP at 2; 15 U.S.C. §§ 78o(b)(4)(B)(iv), 

(6)(A)(ii), 80b-3(e)(2)(D), (f).

37 603 F.2d 1126, 1140 (5th Cir. 1979), aff’d on other grounds, 450 U.S. 91 

(1981); see Scammell, 2014 WL 5493265, at *5. 

38 David R. Wulf, Exchange Act Release No. 77411, 2016 WL 1085661, at 

*4 (Mar. 21, 2016) (citing Vladimir Boris Bugarski, Exchange Act Release 

No. 66842, 2012 WL 1377357, at *4 & n.18 (Apr. 20, 2012)).

39 See Peter Siris, Exchange Act Release No. 71068, 2013 WL 6528874, at 

*11 n.72 (Dec. 12, 2013), pet. denied, 773 F.3d 89 (D.C. Cir. 2014). Although 

relevant, general deterrence is not determinative in assessing whether the 

(continued...)
7

In weighing the public interest, I am mindful that “in most” cases 

involving fraud, the public-interest analysis will weigh in favor of a “severe 

sanction.”41 And because “[t]he securities industry presents continual 

opportunities for dishonesty and abuse,” it “depends heavily on the integrity 

of its participants and on investors’ confidence.”42 Investment advisers, in 

particular, serve as fiduciaries who owe their clients “an affirmative duty of 

‘utmost good faith, and full and fair disclosure of all material facts,’ as well as 

an affirmative obligation to employ reasonable care to avoid misleading 

clients.”

43 Given the industry’s dependence on the integrity of its 

participants, the duty investment advisers owe their clients, and the 

confidence and trust investors necessarily place in investment advisers, the 

Commission takes a particularly dim view of investment advisers who 

defraud their clients.44 Evaluating the Steadman factors through this lens, it 

is plain that collateral and penny stock bars are appropriate.

Bucci’s fraud was egregious and recurrent. He made promises regarding 

repayment and rates of return that he knew were improbable, if not 

 

public interest weighs in favor of imposing a bar. PAZ Sec., Inc. v. SEC, 494 

F.3d 1059, 1066 (D.C. Cir. 2007).

40 Gary M. Kornman, Exchange Act Release No. 59403, 2009 WL 367635, 

at *6 (Feb. 13, 2009) (quoting David Henry Disraeli, Securities Act Release 

No. 8880, 2007 WL 4481515, at *15 (Dec. 21, 2007), pet. denied, 334 F. App’x 

334 (D.C. Cir. 2009)), pet. denied, 592 F.3d 173 (D.C. Cir. 2010).

41 Siris, 2013 WL 6528874, at *11 n.71 (quoting Jeffrey L. Gibson, 

Exchange Act Release No. 57266, 2008 WL 294717, at *7 (Feb. 4, 2008), pet. 

denied, 561 F.3d 548 (6th Cir. 2009)).

42 Mark Feathers, Exchange Act Release No. 73634, 2014 WL 6449870, at 

*3 (Nov. 18, 2014) (alteration in original) (quoting Tzemach David Netzer 

Korem, Exchange Act Release No. 70044, 2013 WL 3864511, at *6 & n.53 

(July 26, 2013)).

43 Conrad P. Seghers, Advisers Act Release No. 2656, 2007 WL 2790633, at 

*7 (Sept. 26, 2007) (ultimately quoting Capital Gains Research Bureau v. 

SEC, 375 U.S. 180, 194 (1963)), pet. denied, 548 F.3d 129 (D.C. Cir. 2008).

44 See James C. Dawson, Advisers Act Release No. 3057, 2010 WL 2886183, 

at *4 (July 23, 2010) (“[W]e have consistently viewed misconduct involving a 

breach of fiduciary duty or dishonest conduct on the part of a fiduciary, such 

as the fraud committed by Dawson on his clients, as egregious.”).
8

impossible.

45 He concealed information regarding his personal finances that 

he knew would be material to investors.46 He exploited not only his adviseradvisee relationships, but personal relationships with friends and family.47 In 

short, over the course of a decade, Bucci stole at least $3 million from over 

twenty people who trusted him.48

The behavior that made Bucci’s fraud egregious also evidences a high 

degree of scienter. He told investors that he was using their money to invest 

in one thing—an olive oil and wine shop, real estate—when he was, instead,

using it to pay the personal debts that he had concealed from the same 

investors.49 No matter how much he may have “hope[d]” to make up that 

money from other deals, there can be no doubt that he knew as a long-time 

industry professional that he was abusing his clients’ trust.50 Furthermore, 

his Section 10(b) violation necessarily involved scienter.51

By defaulting in this proceeding, Bucci has neither made assurances 

against future violations nor shown that he recognizes the wrongful nature of 

his conduct. Insofar as there is any evidence relevant to his recognition of his 

wrongdoing in the record, the district court found that he failed to accept 

responsibility for his actions or to fully understand why his behavior was 

wrong in the first place. 

Moreover, allowing Bucci to remain in the securities industry would 

present him with future opportunities for further misconduct and would put 

the investing public at risk. In this regard, the fact of Bucci’s criminal 

 

45 Div. Ex. 1 at 2.

46 Id. at 1–2.

47 Id. at 1.

48 See Id.; Div. Ex. 4 at 2, 5–7.

49 Div. Ex. 1 at 1–2.

50 Id.

51 See 15 U.S.C. § 78j(b); 17 C.F.R. § 240.10b-5; Aaron v. SEC, 446 U.S. 

680, 701–02 (1980).
9

misconduct “raises an inference that” he will repeat it.52 That inference is 

supported by my determination that Bucci’s conduct was egregious.53

Finally, imposing a bar will serve the Commission’s interest in deterring 

others from engaging in similar misconduct. 

In sum, Bucci’s egregious conduct harmed investors and if he were able 

to remain in the industry, he would have the opportunity to cause additional 

harm. The Commission’s interest in protecting the investing public would be 

served by imposing a collateral and penny stock bar.

Order

The Division of Enforcement’s motion for default and sanctions is 

GRANTED. 

Under Section 15(b) of the Securities Exchange Act of 1934 and Section 

203(f) of the Investment Advisers Act of 1940, William D. Bucci is BARRED 

from associating with a broker, dealer, investment adviser, municipal 

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

statistical rating organization.

Under Section 15(b) of the Securities Exchange Act of 1934, William D. 

Bucci is BARRED from participating in an offering of penny stock, including 

acting as a promoter, finder, consultant, agent, or other person who engages 

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

trading in any penny stock, or inducing or attempting to induce the purchase 

or sale of any penny stock.

This initial decision will become effective in accordance with and subject 

to the provisions of Rule 360.54 Under that rule, a party may file a petition for 

review of this initial decision within twenty-one days after service of the 

 

52 Korem, 2013 WL 3864511, at *6 n.50 (quoting Geiger v. SEC, 363 F.3d 

481, 489 (D.C. Cir. 2004)).

53 See Geiger, 363 F.3d at 489 (holding that a finding of egregiousness 

“justifies the inference” that misconduct will recur); Warwick Capital Mgmt., 

Inc., Advisers Act Release No. 2694, 2008 WL 149127, at *11 (Jan. 16, 2008) 

(“The existence of a violation raises an inference that the violation will be 

repeated, and where the misconduct resulting in the violation is egregious, 

the inference is justified.”).

54 See 17 C.F.R. § 201.360.
10

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 111.55 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 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 occurs, the initial decision shall not 

become final as to that party.

Bucci may move to set aside a default. Rule 155(b) permits the 

Commission, at any time, to set aside a default for good cause, in order to 

prevent injustice and on such conditions as may be appropriate.56 A motion to 

set aside a default shall be made within a reasonable time, state the reasons 

for the failure to appear or defend, and specify the nature of the proposed 

defense in the proceeding. Such motion, if filed, should be directed to the 

Commission, as the hearing officer may only set aside a default “prior to the 

filing of the initial decision.”57

_______________________________

James E. Grimes

Administrative Law Judge

 

55 See 17 C.F.R. § 201.111.

56 17 C.F.R. § 201.155(b).

57 Id.