Peter EICHLER and Basil Witt, Petitioners, v. the SECURITIES AND EXCHANGE COMMISSION, Respondent

Peter Eichler and Basil Witt brought this action seeking review of an order issued by the Securities and Exchange Commission (“SEC”). The SEC’s order affirmed disciplinary sanctions imposed upon Eichler and Witt by the National Association of Securities Dealers, Inc. (“NASD”). We affirm.

I •

BACKGROUND

Bateman Eichler, Hill Richards, Inc. (“BEHR”) is registered as a broker-dealer with the SEC and is a member of NASD. At the time of the events at issue in this case, Eichler was president of BEHR and Witt was the head of BEHR’s trading de partment. William Walker was BEHR’s syndicate manager.

In March 1977, BEHR served as managing underwriter for a syndicate of thirty-one firms that were underwriting a public offering of securities by Jhirmack Enterprises, Inc. (“Jhirmack”). The syndicate offered a total of 385,000 shares of Jhirmack stock. When BEHR and the other firms completed the distribution of Jhirmack shares on March 24, 1977, the syndicate had sold 398,200 shares, leaving the syndicate “short” 13,200 shares. BEHR was responsible for covering its share of the syndicate’s short position.

After the syndicate completed the distribution, BEHR began taking orders from its…