HINKLE NORTHWEST, INC., Ernest F. Hinkle, Kenneth T. LaMear and Dennis B. Reiter, Petitioners, v. SECURITIES AND EXCHANGE COMMISSION, Respondent

Petitioners seek review of a suspension order of the Securities and Exchange Commission (“SEC”) following a finding that they willfully violated recordkeeping, reporting, and financial-responsibility rules. We find that petitioners were correctly determined to be owners of the securities in issue, that the SEC was not collaterally estopped from so asserting, and that the sanctions imposed were justifiable. We therefore affirm.

I.

In early 1975, Benjamin Franklin Savings and Loan Association (“Franklin”) of Portland, Oregon opened an account with Hinkle Northwest, Inc. (“Northwest”), a registered broker-dealer and investment adviser. Jack Wied, at that time treasurer and a vice-president of Franklin, conducted his employer’s business with Northwest. Wied engaged in municipal securities trading for Franklin’s account.

Some months later, Wied entered into an arrangement with the officers of Northwest to use Franklin’s credit to buy, in two transactions, over $125,000,000 in securities for Northwest’s account through the mechanism of open reverse repurchase agreements (“reverse repos”). Although Franklin’s credit was to be used for these purchases, Northwest was to be the owner of…