## Facts

- Michael W. Crow founded and controlled an unregistered entity, Duncan Capital Group LLC, and was a central figure in the operations of Duncan Capital LLC, a registered broker-dealer.
- A federal district court entered a final judgment against Crow after trial, finding he oversaw a registered broker-dealer’s brokerage activities while unregistered and received the bulk of related profits.
- The broker-dealer acted as placement agent for roughly 20 securities offerings, raising over $100 million for issuers; Crow received millions in cash compensation and warrants.
- The court found aggravating conduct, including scienter, concealment, disregard of counsel, breach of a prior SEC consent agreement, and lack of acknowledgment of wrongdoing, and entered an injunction for securities-law violations.
- Based on the federal injunction, the SEC instituted a follow-on administrative proceeding under Exchange Act § 15(b) and Advisers Act § 203(f) and sought summary disposition as to sanctions.
- An SEC Administrative Law Judge issued an initial decision imposing an industry bar on Crow; no party sought Commission review, and the Commission later declared the ALJ decision final and effective.

## Issues

1. Whether Crow’s federal-court injunction and adjudicated misconduct made him subject to an associational bar under Exchange Act § 15(b) and Advisers Act § 203(f).
2. Whether it was appropriate to resolve the follow-on administrative matter by summary disposition, treating the federal-court injunction and findings as established.
3. Whether a bar from association with any broker, dealer, or investment adviser was in the public interest.

## Decision

- The ALJ granted relief against Crow in the follow-on proceeding based on the prior injunction and underlying adjudicated conduct.
- The ALJ ordered that, pursuant to Exchange Act § 15(b) and Advisers Act § 203(f), Crow be barred from association with any broker, dealer, or investment adviser.
- The Commission did not order review, and no petition for review was filed; the Commission declared the ALJ’s initial decision final and the bar effective.

## Legal Principles

- Exchange Act § 15(b) and Advisers Act § 203(f) authorize the SEC to impose associational bars on persons enjoined from specified securities-law violations when such relief is in the public interest.
- In follow-on administrative proceedings predicated on a federal-court injunction, the SEC may treat the injunction and adjudicated findings as established and focus on the appropriate remedial sanction.
- Public-interest analysis for an industry bar commonly considers factors including egregiousness, scienter, recurrence, recognition of wrongdoing, assurances against future violations, and the likelihood of future opportunities to violate the law.

## Conclusion

The SEC made final an ALJ order barring Michael W. Crow from association with any broker, dealer, or investment adviser, concluding that his enjoined, knowing, and concealed misconduct as an unregistered principal of a registered broker-dealer warranted an industry-wide bar in the public interest.


In re Michael W. Crow, Exchange Act Release No. 59982, Advisers Act Release No. 2881 (SEC May 27, 2009)