UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported) March 16, 2010
Gilman
Ciocia, Inc.
(Exact
name of registrant as specified in its charter)
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Delaware
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000-22996
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11-2587324
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(State
or other jurisdiction
of
incorporation)
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(Commission
File
Number)
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(IRS
Employer
Identification
No.)
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11
Raymond Avenue, Poughkeepsie, New York
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12603
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code (845) 485-5278
N/A
(Former
name or former address, if changed since last report.)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy
the filing obligation of the registrant under any of the following provisions
(see General Instruction A.2. below):
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¨
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange
Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item
1.01. Entry into a Material Definitive Agreement.
On June
30, 2009, the Securities and Exchange Commission (“SEC”) executed
an Order Instituting Administrative and Cease-And-Desist Proceedings
Pursuant to Section 8A of the Securities Act of 1933, Sections 15(b) and
21C of the Securities Exchange Act of 1934, and Section 203(f) of the
Investment Advisers Act of 1940 against Gilman Ciocia, Inc. (the “Company”),
Prime Capital Services, Inc., a wholly owned subsidiary of the Company
(“PCS”), Michael P. Ryan, the Company’s CEO, Rose M. Rudden, the Company’s
Chief Compliance Officer and certain other current and former Company
employees (the “Instituting Order”).
On March
16, 2010, the SEC approved the Offer of Settlement by the Company
and PCS regarding the Instituting Order (the “Settlement”). The SEC executed
an Order Making Findings and Imposing Remedial Sanctions Pursuant to
Section 8A of the Securities Act of 1933, Sections 15(b) and 21C of the
Securities
Exchange Act of 1934, and Section 203(f) of the Investment Advisers
Act of 1940 as to PCS and the Company (the “Settlement Order”).
Except as
to the SEC’s jurisdiction over them and the subject matter of the
Instituting Order, the Company and PCS agreed to the Settlement without
admitting
or denying the findings contained in the Settlement Order. The Company
and PCS chose to settle to avoid costly and protracted litigation.
Under the
terms of the Settlement, the Company and PCS agreed to certain undertakings
including retaining an Independent Compliance Consultant to conduct a
comprehensive review of their supervisory, compliance and other policies,
practices and procedures related to variable annuities. The Independent
Compliance Consultant will submit a report to the SEC at the conclusion
of its review.
In
addition, the Company and PCS consented to certain sanctions pursuant
to
Section 8A of the Securities Act and Sections 15(b) and 21C of the Exchange
Act. PCS shall cease and desist from committing or causing any violations
and any future violations of Section 17(a) of the Securities Act and
Sections 10(b), 15(c) and 17(a) of the Exchange Act and Rules 10b-5 and
17a-3
thereunder. The Company shall cease and desist from committing or causing
any violations and any future violations of Section 17(a) of the Securities
Act and Sections 10(b) and 15(c) of the Exchange Act and Rule 10b-5
thereunder. PCS and the Company were censured.
PCS
agreed to pay disgorgement of $97,389.05 and prejudgment interest of
$46,873.53, for a total payment of $144,262.58 within twenty (20) days
from the
issuance of the Settlement Order. The Company agreed to pay civil penalties
of $450,000 and disgorgement of $1.00. Payment of the civil penalties
by the Company shall be made in the following installments: $53,824.28
is to be paid within twenty (20) days of the issuance of the Settlement
Order; $198,087.86 is to be paid within 180 days from the issuance
of the Settlement Order; and $198,087.86 is to be paid within 364 days from
the issuance of the Settlement Order, with post-judgment interest due on
the second and third installments.
Copies of
the Offer of Settlement and the Settlement Order will be attached
to the Company’s Form 10-Q for the quarter ending March 31, 2010.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto
duly authorized.
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Gilman
Ciocia, Inc.
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(Registrant)
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Date
March 19, 2010
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/s/ Michael Ryan | |
| Name: |
Michael
Ryan
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Title:
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Chief
Executive Officer
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