The opinion of the court was delivered by: NEWMAN
BERNARD NEWMAN, Senior Judge:1
The United States Security and Exchange Commission ("SEC"), brings this civil securities fraud enforcement action against Frederick Augustus Moran ("Moran Sr."), Frederick Winston Moran ("Moran Jr."), Moran Asset Management Inc. ("Moran Asset"), and Moran & Associates, Inc., Securities Brokerage ("Moran Brokerage"). Specifically, the SEC alleges that Moran Sr., Moran Jr., Moran Asset, and Moran Brokerage engaged in insider trading thereby violating Section 10(b) of the Securities Exchange Act of 1934 ["the Exchange Act"] and Rule 10(b)(5) thereunder; that Moran Sr. and Moran Asset defrauded their clients in violation of Sections 206(1) and (2) of the Investment Advisers Act of 1940 ["the Advisers Act"]; and that Moran Sr., Moran Asset, and Moran Brokerage made willful misstatements and omissions in violation of Sections 204 and 207 of the Investment Advisers Act of 1940, Rule 204-1(b)(1) thereunder, Section 15(b) of the Securities Exchange Act of 1934, and Rule 15b3-1 thereunder. The SEC seeks judgment permanently enjoining each of the defendants from violating the pertinent provisions of the Exchange Act and the Advisers Act, disgorgement of all illegal profits, prejudgment interest arising from the alleged insider trading, payment of three time civil penalties based on the insider trading, and civil money penalties for the violations of the Advisers Act alleged in the complaint. The defendants deny each of the allegations lodged against them and seek dismissal of the complaint.
The matter arises under the court's jurisdiction, pursuant to the Exchange Act [ 15 U.S.C. §§ 78u(d), 78u(e), 78u-l, and 78aa] and the Advisers Act [ 15 U.S.C. §§ 80b-9(e) and 80b-14]. With the consent of each party, the court bifurcated the liability phase of this case from any subsequent penalty phase. See Order dated October 30, 1995. Accordingly, the only issues presented to the court at this juncture are the liability of the defendants for the charges in the complaint. The case was tried to the court in a twelve day bench trial. In conformity with F.R.C.P. Rule 52(a), the following constitutes the court's findings of fact and conclusions of law.
In its direct case, the SEC presented eight witnesses: John Reddan, executive vice-president and security analyst for Moran & Associates Securities Brokerage from May 1985 until October 31, 1995; defendant Frederick Winston Moran, a vice-president at Salomon Brothers; defendant Frederick Augustus Moran, president of Moran Asset Management and Moran & Associates Brokerage
; Richard Scribner, chief compliance officer for Salomon Brothers, Inc.; Edward Meyercord, vice-president in investment banking for Salomon Brothers; Frank Poli, an attorney, who in 1993 was the head trader for Moran Asset Management; Peter D. Crawford, executive director of investor relations and share owner relations for Bell Atlantic Corporation; and Kevin Tarrant, manager of investor relations for Bell Atlantic Corporation. Defendants did not present any witnesses
On rebuttal plaintiff called Raymond Liguori, who was employed as the telecommunication analyst for Salomon Brothers in October 1993
Pursuant to agreement by counsel and F.R.C.P. Rule 32(a)(3)(E), the depositions of Susan Putnam, vice-president of Moran Asset and Moran Brokerage, Katherine Dietze Courage, a director at Salomon Brothers, Richard Holbein, the president of Pension Asset Consulting Associates Inc., and Jennifer Netterville, the investment officer of Louisiana Teacher's Retirement Fund, were admitted into evidence. The parties moved 213 exhibits into evidence.
CONTENTIONS OF THE PARTIES
The SEC alleges that Moran Sr. and his companies acted upon inside information about two cable companies provided by Moran Jr., his son. According to the SEC, Moran Jr. "tipped" Moran Sr. with respect to a merger between Bell Atlantic and Telecommunications Incorporated ("TCI"). This circumstantial case revolves around the fact that Moran Jr., as an employee of Salomon Brothers, was in possession of material, non-public information with respect to the Bell Atlantic-TCI merger. Moran Sr. who had previously been reticent to trade cable stocks, after a series of phone conversations with his Moran Jr., made large purchase of Liberty, TCI and other cable company stocks on October 11, 1993, two days before the October 13, 1993 official announcement of the merger. The SEC argues that because Moran Sr. and his companies had lost substantial money and clients as the result of a very unsuccessful prior investment in Chamber Development stock, Moran Sr. needed a "sure winner." Moreover, plaintiff contends that Moran Jr. had a history of violating Solomon Brothers' policies regarding confidential information in order to benefit Moran Sr.'s firms, thereby demonstrating an intent on the part of Moran Jr. to provide his father with confidential information. Finally, plaintiff alleges that because Moran Sr. had previously been bearish on cable, these October 11th stock purchases constituted an aberrant trading pattern for Moran Sr., there were several phone calls between Moran Sr. and Jr., including one for over forty minutes the week before Moran Sr. made the stock purchases, and Moran Sr. faxed to Moran Jr. the Moran "morning meeting notes" specifying the switch in cable policy on the morning of the stock purchases indicates that the defendants traded the cable securities as a result of material, non-public information in violation of the Exchange Act and Rules thereunder.
The SEC further states that Moran Sr. and Moran Asset violated sections 206(1) and (2) of the Advisers Act
Specifically, it charges that Moran Sr. allocated shares of Liberty stock to his personal and family account at a lower price than paid by his clients, thereby placing his own interest above that of his clients. Additionally, the SEC claims that Moran Sr. and his companies violated Sections 204 and 207 of the Advisers Act, as well as, Section 15(b) of the Exchange Act. Although Moran Asset was required to promptly file amendments to its Form ADV when previous information became inaccurate, the SEC asserts that Moran Asset did not include the names of Moran Sr.'s wife and two of his children who were named as directors. The SEC points out that even when the Form ADV was amended to include Moran Sr.'s wife, no mention was made of his two children who had been elected directors. Further, the SEC charges that Moran Brokerage violated the Exchange Act in that an amendment to its Form BD was not timely filed when Moran Sr.'s wife and children became directors. Moran Sr., as a "control person" of the companies is charged with accomplice liability of these omissions which plaintiff maintains are willful and material.
Defendants deny each of the charges. Specifically, Moran Sr. and Moran Jr. respond that Moran Jr. in no way "tipped" any material non-public information with respect to the Bell Atlantic-TCI merger. Defendants maintain that Moran Sr.'s change of heart regarding the cable stocks came about as a result of the actions of Dr. John Malone, a "giant" in the cable industry. Moran Sr. claims that his return to purchasing cable stocks resulted from following Malone's lead. Indeed, defendants additionally point out that news of the impending merger was made public through newspaper articles in the New York Times and the Wall Street Journal. Moran Sr. argues that it was during the weekend of October 9-10, after reading a Wall Street Journal article about a merger between TCI and Liberty, that he made his final decision to begin investment in cable stocks.
Defendants Moran Sr. and Moran Asset also dispute the allegations regarding the Advisers Act. Moran Sr. asserts that while there was an error with regard to the amount of stock that was purchased as well as its allocation, the error was an honest mistake that did not involve any fraud or misrepresentation with respect to the dissemination of investment advice. Moreover, defendants contend that there was no "willful" omissions on either the Form ADV or Form BD. While Moran Sr. concedes that his wife and two sons were not listed on the forms as directors, he maintains that such omission was inadvertent and was ultimately corrected. In addition, defendants contend that the omitted information was not "material" and therefore its omission was not a violation of securities law.
Frederick Augustus Moran ("Moran Sr.") is the president and principal portfolio manager of Moran Asset Management Inc., as well as the president and director of research of Moran & Associates, Inc. Securities Brokerage. Frederick Winston Moran Jr. ("Moran Jr.") is Moran Sr.'s eldest son and has been employed since March 1993 by Salomon Brothers Inc. as an analyst specializing in the cellular telephone and wireless communications industries. In July 1993, while working for Salomon Brothers, Moran Jr. expanded his focus to the cable television industry for Salomon Brothers. Moran Asset Management, Inc. ("Moran Asset") since 1986 has been a registered investment adviser. Moran & Associates, Inc. Securities Brokerage ("Moran Brokerage") since 1987 has been a registered broker-dealer. Moran Sr. and his wife Joan, during the periods in question each owned 50% of the stock of Moran Asset and Moran Brokerage.
The Insider Trading Claim
On October 3, 1993, Moran Jr. was "brought over the wall
" at Salomon Brothers with regard to a proposed merger between Telecommunication Incorporated ("TCI") and Bell Atlantic. Moran Jr. was told that the official announcement of the merger would come "within a week to two weeks" (R. 437). On Wednesday, October 6, Moran Jr. was briefed on the details of the proposed Bell Atlantic/TCI merger and told by Edward Meyercord that the announcement was expected to take place early the following week. Moran Jr.'s understanding was that the announcement date "would probably be the 13th, or certainly the 12th, 13th, or 14th" (R. 437). On Thursday, October 7, the Wall Street Journal published an article entitled "TCI Reported In Talks To Buy Liberty Media" (Exhibit 11).
Moran Jr. attended a meeting at Bell Atlantic headquarters in Philadelphia on October 9, 1993. The purpose of the meeting was twofold. First, there were discussions about how to best market the Bell Atlantic/TCI merger. Second, the speech that the president of Bell Atlantic would deliver when the deal was announced was drafted. At this meeting Salomon Brothers representatives, including Moran Jr., learned for the first time that the definitive date of the announcement regarding the merger was October 13. According to Meyercord, "there was a very detailed media plan that was put together and . . . there was to be a public announcement in New York City in the morning in which the analyst community would be present" (R. 894). This media plan also set forth October 13 as the date of the public announcement (Exh. 1).
On October 11, 1993 Moran Sr. bought approximately 340,000 and 203,000 shares of TCI and Liberty stock respectively. During the evening of October 12, Moran Jr. told employees of Moran Asset and John Reddan about the merger. The proposed merger of Bell Atlantic and TCI was publicly announced by a press release issued at approximately 7:00 a.m. on October 13.
Moran Sr.'s Trading Practice
From 1987 through 1991 Moran Sr. invested at least 35% and as much as 45% of his clients' managed funds in cable television stocks. In 1991, Dr. John Malone, the President and Chief Executive Officer of TCI, the largest cable company in the world, began moving his personal wealth out of TCI, a cable television operator company, and into Liberty, a programing company. Moran Sr. testified that at the time of Malone's transaction, the move did not seem significant "because [Moran Asset's] impression was that [Malone] had exercised only half of his rights and [Moran Sr.] thought that was therefore a case of saying to the world I am not abandoning Liberty and it was something he did with that in mind and he had not exercising all of his rights" (R. 1406-07; 1411 Moran Sr. Exh. CX). At that juncture, Moran Sr. believed that Malone was actually increasing his backing of TCI and therefore Moran Sr. increased his purchases of TCI stocks. In fact, however, Dr. Malone was tendering all of his TCI shares in exchange for increased stocks in Liberty (R. 773, 1413; Moran Sr. Exhs. CW, CQ). From October 25, 1991, when Dr. Malone publicly disclosed his venture into Liberty, and until Liberty recombined with TCI, Liberty's stock price had increased by 3000 percent. During this time Moran Sr. was still a proponent of cable stocks.
Beginning in 1992 Moran Sr.'s view of the cable industry began to change. In addition, Moran Sr. learned on January 7, 1992 that Malone had actually liquidated his TCI holdings to pay for his investment in Liberty. Moran Sr. was further aware that Malone was an outspoken critic of government regulation of the cable industry and predicted a negative impact would result. In response to the problems he believed would result from increased regulation of the cable industry, as well as the discovery that Malone had in fact been divesting himself from TCI holdings, Moran Sr. began selling cable stocks in Moran Asset's client accounts beginning in 1992 (R. 780-82; Exhs. 39-40). On January 8, 1992 Moran Sr. began selling TCI and Comcast stock and within several weeks Moran Asset sold out all its cable stock positions almost completely. According to Moran Sr., the decision to sell was made by him without first consulting Moran Jr. or John Reddan.
In addition to selling TCI stock, Moran Sr. decided to cover the short position he had in Liberty stock
According to Reddan, the short position was closed at a substantial loss. With respect to Moran Sr.'s reaction after these transactions, Redden testified that "[Moran Sr.] said we've got to learn our lesson here. Malone has a tremendous following. [Moran Sr.] never wanted to go against him again. And it was more -- our feeling that Malone's following was more powerful than we had estimated" (R. 775)
During 1993, Malone appeared to be moving further into programming and away from cable television. This move was well documented in Moran Brokerage Morning Meeting Notes. Specifically, the notes stated:
There is a rumor that TCI will purchase Liberty Media's cable properties. This would mean 1) John Malone would be reducing further his cable interests and moving further into programming inhibits the cable companies ability to pass on programming price increases.
(Morning Meeting Note May 27, 1993, Moran Sr. Exh. K).
NYT article: -- Cable television John Malone is moving further into programming in response to regulatory and technological changes.
(Morning Meeting Note, June 1, 1993, Moran Sr. Exh. L).
Fortune article: John Malone calls President Clinton a bold face liar. Two possible reasons for this unguarded behavior are: 1) he is so frustrated with what Congress has done to the cable industry, or 2) won't be around to bear the consequences. Recently he has begun to say it is too much trouble for him to be Chairman of both Liberty Media and Telecommunications.
(Morning Meeting Note, June 14, 1993, Moran Sr. Exh. M).
[Liberty Media is] rumored to be planning to swap its interests in cable system for TCI's interest in programming assets -- especially Turner Broadcasting and Discovery Channel. Malone is moving away from cable systems and toward programming.
(Morning Meeting Note, September 20, 1993, Moran Sr. Exh. N).
It is undisputed that from 1992 and into August 1993 Moran Sr. was "bearish" on cable stocks. Indeed, published materials from Moran Brokerage clearly demonstrate Moran Sr.'s unfavorable view of cable stock. In Moran Asset's morning meeting notes from March, April, and June 1993, Moran Sr. predicted that "cable TV stocks, as a group, offer modest upside potential and substantial downside risk," that regulation "was more severe than our forecasted worst case scenario," and that "the focus on technology in cable is causing investors to overlook a serious negative -- reregulation" (Exhs. 38 and 45). Included in Moran Sr.'s negative view of the cable television industry was TCI. Aside from completely liquidating all of the Moran Asset's holdings in TCI in 1992, Moran Asset's good relationship with TCI came to an end because according to Reddan, "we had become negative on the cable industry" (R. 61). In the Moran Morning Meeting notes of July 20, 1993, Moran Brokerage concluded that
[TCI] Conference call regarding effects of reregulation: effect is somewhat less than expected. Annual revenue is reduced roughly 3% to 4% compared to a 6% to 8% expected. . . . Even with relatively mild effects, six of TCI's credit agreements will go into technical default. Continue to recommend strength as growth will be very tough over next year.
(Exh. 107). Even as late as September 24, 1993 Moran's morning meeting note stated that "Sumner Redstone's antitrust lawsuit against TCI, Liberty Media and QVC has very serious long term negative implications for those companies. It is likely to . . . increase regulatory scrutiny or pressure on those companies" (Exh. 38 at 55; R. 1172-73).
Moran Sr.'s position on cable stocks becomes an issue of dispute between the parties starting in September 1993. The last recommendation to sell cable stocks appeared in Moran Brokerage's morning meeting note for August 26, 1993 (Moran Sr. Exh. BF). While future morning meeting notes, up until the time in question did not include a recommendation to buy cable stocks, the recommendation was the more neutral "hold." According to Reddan, Moran Sr. "began to soften his views in September of 1993, and in October of 1993 he changed his views" (R. 782).
In support of his claim that he was changing his view of cable stocks, Moran Sr. points to the fact that he, along with Susan Putnam, attended a Donaldson Lufkin & Jenrette media conference relating in part to the cable industry from September 20 to September 22, 1993. While there, Moran Sr. learned both that the industry was developing the technology to compete with local telephone companies for long distance access charges by enabling cable companies to carry long distance service over coaxial telephone lines and that Bell Atlantic was permitting cable companies to access its research related to video service over the "twisted pair" copper wires which carry telephone service (R. 1464-1468; Moran Sr. Exh. O). Moran Sr. also learned of technological advances being made by cable companies with respect to their potential long distance capabilities on September 23, 1993 at a Scientific Atlanta meeting. Believing that this innovation could produce an "enormous revenue stream" for cable companies, Moran Sr.'s notes made at the conference read: "Conclusions -- sell [local exchange carriers]. . . buy cable" (R. 1468-1471; Moran Sr. Exh. P). In fact, Moran Sr. set forth in the Moran Brokerage Morning Meeting Notes of September 24, 1993 that:
Bottom Line: Of all these competitors, the telcos are in poorest position to compete in video services. Cable companies will enter the long distance telephone business. Cable companies in nine months will attach unit to outside of the home that will reverse amplifiers on existing coax reverse line, will carry the telephone signal. Long distance calls will be offered. AT&T wants the cable companies there to reduce the access charges. Cable companies will be looking at an enormous revenue stream
Moran Sr. Exh. S. Thus, Moran Sr. asserts, the evidence demonstrates that he was now "primed to get back into cable." See Frederick A. Moran's Post Trial Brief p. 19.
The SEC, on the other hand, argues that the Moran Sr.'s claim that he was turning bullish on cable stocks beginning in August 1993 is contradicted "not only by the morning meeting notes, but also by the testimony of Susan Putnam." See, Plaintiff's Proposed Finding of Fact and Conclusions of Law, p. 35. In support of this claim, the SEC points to the morning meeting note of September 24, 1993 addressing the Redstone anti-trust lawsuit against TCI (Exh. 55). In addition, Putnam stated that after seeing a presentation with respect to the Jones Intercable on September 23, 1993, she suggested to Moran Sr. that it might be an "interesting" investment idea (Putnam Deposition, p. 88). Putnam recalled Moran Sr. telling her that "he felt regulation was still a major problem." (Id.). The SEC maintains that this evidence demonstrates that Moran Sr. was not interested in investing in cable. With respect to the other proof relied upon by Moran Sr., the SEC suggests that the very technology Moran Sr. claims he was impressed with, was actually nothing more than innovations which Reddan had been expecting "for some time during the year 1993" (R. 822). Coupled with the fact that Moran did not buy any cable stock after attending the conferences and assigned Scientific Atlanta to Susan Putnam for further study, the SEC concludes that Moran Sr. was still "bearish" on cable.
In resolving this dispute of fact, the court finds that while there is no suggestion that Moran Sr. turned "bullish" on cable stocks in September 1993, there is ample credible evidence that Moran Sr. had begun to soften his view on the cable industry. Indeed, the SEC admits that Moran Sr.'s "firm decided to do more research on the cable phone." SEC Proposed Findings of Fact and Conclusions of Law, p. 36. Additionally, while the conversation with Putnam indicates Moran Sr. was still concerned with regulation of the cable industry, the court will not ignore the documentary evidence with respect to telecommunications, which Moran Sr. would reasonably consider in deciding upon a position to take about cable stocks. Moreover, contrary to Moran Asset's practice since 1992, after August 26, 1993, Moran Morning Meeting Notes no longer included a "sell" recommendation with respect to cable stocks. Significantly, on August 24, 1993, Bell Atlantic won a lawsuit challenging the 1984 Cable Act, which prohibited telephone companies and their affiliates from providing video programming to subscribers in their own telephone service area. While this decision paved the way for competition in the cable television industry, Moran Sr. viewed the "competition as an alternative to regulation" (R. 1459). Knowing that its monopoly status was behind the regulation of the cable industry, Moran Sr. reasoned that "if you had competition in place instead of regulation, you wouldn't need regulation" (R. 1459). Finally, Moran Sr. did not fear the idea of competition in the cable industry because he "had clearly determined the cable companies would be overwhelming winners" (R. 1459). Referring to a report Moran Sr. had previously published he stated, "as far back as 1988 we made that decision" (R. 1459; Moran Sr. Exh. A).
While the SEC argues that "one would most reasonably expect that if the Moran firms were again to take a long position in cable stocks, they would do so either (a) in an orderly fashion; (b) on the basis of careful, detailed and documented research into the fundamentals of cable companies; and/or (c) over an extended period of time," (SEC Proposed Finding of Facts and Conclusions of Law, p. 36), the evidence in this case amply demonstrates that was not the way Moran Sr. typically operated. Reddan testified that "Fred's style is to jump in with both feet. Over the course of our ten-year relationship, we've had many of these disagreements primarily because of a difference in approach. I'm more cautious; Fred is more -- acts more decisively" (R. 139). Accordingly, the court finds that the evidence supports defendants' contention that Moran Sr. was softening his view on the cable industry.
The Alleged Motive and Intent of Moran Jr. to give and Moran Sr. to Trade using Material Non-Public Information
The SEC alleges that because of a very negative experience with Chamber's Development stock, Moran Sr. had a motive to want a "sure thing." In addition, the SEC further claims that Moran Jr.'s conduct
demonstrates that he had the intent to provide his father with inside information. Moran Sr. responds that the losses sustained by his venture into Chambers stock were over with, that his company was doing well, and that even if his company were to fold, he could have comfortably retired. Moran Jr. maintains that none of the actions raised by the SEC constitute any breach of securities law or in any way indicates he would act inappropriately to benefit his fathers firm.
It is undisputed that the decision by Moran Sr. to invest in Chambers Development Company resulted in significant financial losses for Moran Sr.'s clients as well as his personal account. Shortly after an announcement in March 1992 that Chambers' net income was far less than had been previously reported, Moran Sr. began aggressively purchasing Chambers stock for his clients. By the end of 1992, Moran Sr., Moran Asset, and Moran Brokerage had become the largest or second largest outside shareholder of Chambers. While Moran Asset continued to purchase Chambers stock during 1992, the price of the stock steadily declined. At one point the price of Chamber stock fell approximately 60 percent. Because of the losses being sustained by Moran Sr.'s clients, Reddan testified that beginning in 1992, business began to fall off. Specifically he stated:
we no longer were beating the market, we were lagging the market and that was beginning to catch up. I think about it, 1990 we had a bad year because several factors, the credit crunch and this was the first wave of cable regulation. '91 we did fairly well, but in '92 we began to lag the market and cumulatively the business wasn't going that well.
(R. 109). In fact, Moran Sr. characterized Chambers as the worst investment experience of his entire business career and in terms of dollars, Chambers represented the largest loss that Moran Sr. had ever suffered on a single stock. Moran Sr. also conceded that one of the reasons that Moran Asset decreased its long position in Turner Broadcasting in 1993, was "because clients were leaving us" (R. 1299).
There is no question that Moran Jr. was aware of the problems the Chambers stock investment was causing for his father. Moran Jr. specifically testified that he had knowledge of his father's big investment in Chambers stock, and that Moran Sr. was suffering losses. Moran Jr. "knew that . . . two things were occurring; one, that Chambers was not quite performing up to expectations, and I knew that, given several years of less-than-superior performance, [Moran Sr.] was losing clients" (R. 281). By the beginning of October 1993, Moran Jr. was cognizant of the losses Moran Sr. was sustaining owing to the Chambers stock investment.
Moran Sr. responds that while it is true that the Chambers stock was a bad investment, the bulk of the paper losses in Chambers occurred a full year before the Bell Atlantic merger. While in October 1993 the stock was not doing particularly well, the drop in price of Chambers had reached a plateau. In addition, the firms' financial condition in October 1993 was much better than a year earlier. The firms had no debt, and profits for the quarter ending September 1993 were up more than 60% from a year earlier. Finally, Moran Sr. testified that if he were to retire in October 1993 he could have lived at the same comfort level for the rest of his life. In short, Moran Sr. argues that it would be "ridiculous" to conclude that the losses sustained in Chambers stock had anything to do with his decision to reinvest in cable stocks.
The SEC also maintains that Moran Jr. engaged in a pattern of deceptive conduct that indicates he would favor his father's firm even if it meant disclosing confidential material. In support of this assertion, the SEC claims that Moran Jr. was not forthright with Salomon Brothers regarding his directorships and outside business interests, that Moran Jr. through subterfuge allowed Moran Asset to listen in to the TCI conference call, and that Moran Jr. was reprimanded because he improperly sent his research publications to Moran Asset. The SEC asserts that this conduct demonstrates a manifest intent by Moran Jr. to provide special assistance to his father's firms. Moran Jr. counters that the incidents pointed to by the SEC do not even demonstrate wrongdoing on his part, and certainly do not establish an intent to violate the law in order to benefit his father. The court shall address each allegation in turn.
With respect to his position as a director and his trust accounts
, the court finds that Moran Jr. did not initially know that he was placed on the board of directors but upon learning of his position, did inform Salomon Brothers about the directorships. Moran Sr. testified that he did not disclose to either of his sons that he had appointed them to the director positions. The fact that Moran Jr. did not participate in running these companies supports the court's conclusion that he had no knowledge of his position. It is not likely that there would have a need to forge Moran Jr.'s signature on resolutions, if he had been aware that he was on the board of directors. At trial, it was quite clear that the signatures on all the Directors' resolutions that purported to be of Moran Jr. were not genuine. The SEC did not dispute that the ...