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News June 28, 2004 Issue

Formerly Barred Individual Allowed Back Into Advisory Industry

In 1999, the SEC permanently barred Peter Comas from associating with any investment adviser or investment company.

Five years later, they’re letting him back in.

Comas was one of fifty-one individual traders named as part of the 1999 NASDAQ market makers settlement. At the time, he was charged with aiding and abetting PaineWebber’s violations, ordered to pay a $210,000 civil penalty, and was barred from associating with any broker, dealer, municipal securities dealer, investment company or investment adviser.

He was allowed to return to the investment management industry for the simple reason that he wasn’t in it back in 1999.

About a year after he was barred, a federal court in the SEC v. Teicher case held that the SEC does not have the authority to impose “collateral bars” — namely, a bar that prohibits, say, an investment adviser from serving as a broker-dealer, or vice-versa — unless the person already had an “industry-specific nexus.” After that ruling, which the SEC unsuccessfully attempted to appeal to the Supreme Court, the SEC stopped seeking collateral bars in its enforcement proceedings.

The SEC confirmed that Comas is the first person subject to a pre-Teicher collateral bar to seek an order vacating the “collateral” part of the bar. Comas’ lawyer, James Walker of Richard, Spears, Kibbe and Orbe, did not return requests for comment.