UNITED STATES OF AMERICA

before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 99584 / February 22, 2024

Admin. Proc. File No. 3-21220

In the Matter of 

HUNG WAI “HOWARD” SHERN

ORDER TO SHOW CAUSE

On October 26, 2022, the Securities and Exchange Commission issued an order 

instituting administrative proceedings (“OIP”) against Hung Wai “Howard” Shern pursuant to 

Section 15(b) of the Securities Exchange Act of 1934.1 On January 23, 2024, the Division of 

Enforcement filed a status report establishing that service of the OIP was made on Shern on 

January 5, 2024, pursuant to Rule 141(a)(2)(iv)(D) of the Commission’s Rules of Practice,

2

as 

authorized by the Commission’s December 26, 2023 order granting the Division’s motion for 

alternative service.3

As stated in the OIP, Shern’s answer was required to be filed within 20 days of service of 

the OIP.4 As of the date of this order, Shern has not filed an answer. The prehearing conference 

and the hearing are thus continued indefinitely.

Accordingly, Shern is ORDERED to SHOW CAUSE by March 7, 2024, why he should 

not be deemed to be in default and why this proceeding should not be determined against him

due to his failure to file an answer and to otherwise defend this proceeding. Shern’s submission 

shall address the reasons for his failure to timely file an answer, and include a proposed answer 

to be accepted in the event that the Commission does not enter a default against him. 

1 Hung Wai “Howard” Shern, Exchange Act Release No. 96157, 2022 WL 15292823 

(Oct. 26, 2022); 15 U.S.C. § 78o(b).

2

17 C.F.R. § 201.141(a)(2)(iv)(D).

3 Hung Wai “Howard” Shern, Exchange Act Release No. 99244, 2023 WL 8894018 (Dec. 

26. 2023).

4

Shern, 2022 WL 15292823, at *2; Rules of Practice 151(a), 160(b), 220(b), 17 C.F.R. §§ 

201.151(a), 160(b), .220(b). 
2

When a party defaults, the allegations in the OIP will be deemed to be true and the 

Commission may determine the proceeding against that party upon consideration of the record 

without holding a public hearing.

5

 The OIP informed Shern that a failure to file an answer could 

result in deeming him in default and determining the proceedings against him.

6

If Shern files a response to this order to show cause, the Division may file a reply within 

14 days after its service. If Shern does not file a response, the Division shall file a motion for 

entry of an order of default and the imposition of remedial sanctions by April 4, 2024. The 

motion for sanctions should address each statutory element of the relevant provisions of Section 

15(b) of the Exchange Act.7 The motion should discuss relevant authority relating to the legal 

basis for, and the appropriateness of, the requested sanctions and include evidentiary support 

sufficient to make an individualized assessment of whether those sanctions are in the public 

interest.

8

 The parties may file opposition and reply briefs within the deadlines provided by the 

Rules of Practice.

9 The failure to timely oppose a dispositive motion is itself a basis for a finding 

of default;

10 it may result in the determination of particular claims, or the proceeding as a whole,

5 Rules of Practice 155, 180, 17 C.F.R. §§ 201.155, .180.

6

Shern, 2022 WL 15292823, at *2.

7

See, e.g., Shawn K. Dicken, Exchange Act Release No. 89526, 2020 WL 4678066, at *2 

(Aug. 12, 2020) (requesting additional information from the Division “regarding the factual 

predicate for Dicken’s convictions” and “why these facts establish” the need for remedial 

sanctions); see also Shawn K. Dicken, Exchange Act Release No. 90215, 2020 WL 6117716, at 

*1 (Oct. 16, 2020) (clarifying the additional information needed from the Division).

8

See generally Rapoport v. SEC, 682 F.3d 98, 108 (D.C. Cir. 2012) (requiring 

“meaningful explanation for imposing sanctions”); McCarthy v. SEC, 406 F.3d 179, 190 (2d Cir. 

2005) (stating that “each case must be considered on its own facts”); Gary L. McDuff, Exchange 

Act Release No. 74803, 2015 WL 1873119, at *1, *3 (Apr. 23, 2015); Ross Mandell, Exchange 

Act Release No. 71668, 2014 WL 907416, at *2 (Mar. 7, 2014), vacated in part on other 

grounds, Exchange Act Release No. 77935, 2016 WL 3030883 (May 26, 2016); Don Warner 

Reinhard, Exchange Act Release No. 61506, 2010 WL 421305, at *3-4 (Feb. 4, 2010), appeal 

after remand, Exchange Act Release No. 63720, 2011 WL 121451, at *5-8 (Jan. 14, 2011).

9

See Rules of Practice 154, 160, 17 C.F.R. §§ 201.154, .160. 

10 See Rules of Practice 155(a)(2), 180(c), 17 C.F.R. §§ 201.155(a)(2), .180(c); see, e.g., 

Behnam Halali, Exchange Act Release No. 79722, 2017 WL 24498, at *3 n.12 (Jan. 3, 2017). 
3

adversely to the non-moving party and may be deemed a forfeiture of arguments that could have

been raised at that time.

11

The parties’ attention is directed to the e-filing requirements in the Rules of Practice.

12

 

We also remind the parties that any document filed with the Commission must be served upon all 

participants in the proceeding and be accompanied by a certificate of service.13

11 See, e.g., McBarron Capital LLC, Exchange Act Release No. 81789, 2017 WL 4350655, 

at *3-5 (Sep. 29, 2017); Bennett Grp. Fin. Servs., LLC, Exchange Act Release No. 80347, 2017 

WL 1176053, at *2-3 (Mar. 30, 2017), abrogated in part on other grounds by Lucia v. SEC, 138 

S. Ct. 2044 (2018); Apollo Publ’n Corp., Securities Act Release No. 8678, 2006 WL 985307, at 

*1 n.6 (Apr. 13, 2006).

12 Amendments to the Commission’s Rules of Practice, Exchange Act Release No. 90442, 

2020 WL 7013370 (Nov. 17, 2020), 85 Fed. Reg. 86,464, 86,474 (Dec. 30, 2020), 

https://www.sec.gov/rules/final/2020/34-90442a.pdf; Instructions for Electronic Filing and 

Service of Documents in SEC Administrative Proceedings and Technical Specifications, 

https://www.sec.gov/efapdocs/instructions.pdf. The amendments impose other obligations such 

as a redaction and omission of sensitive personal information requirement. Amendments to the 

Commission’s Rules of Practice, 85 Fed. Reg. at 86,465-81.

13 See Rule of Practice 150, 17 C.F.R. § 201.150 (generally requiring parties to serve each 

other with their filings); Rule of Practice 151(d), 17 C.F.R. § 201.151(d) (“Papers filed with the 

Commission ... shall be accompanied by a certificate stating the name of the person or persons 

served, the date of service, the method of service, and the mailing address or email address to 

which service was made, if not made in person.”). The Division of Enforcement is represented 

by Devon Leppink Staren and Daniel J. Maher, Securities and Exchange Commission, Division 

of Enforcement, 100 F. Street, N.E., Washington, D.C. 20549; starend@sec.gov and 

maherd@sec.gov.
4

Upon review of the filings in response to this order, the Commission will either direct 

further proceedings by subsequent order or issue a final opinion and order resolving the matter.

For the Commission, by the Office of the General Counsel, pursuant to delegated 

authority.

Vanessa A. Countryman

Secretary