Daniel Joseph ALDERMAN, Petitioner, v. SECURITIES AND EXCHANGE COMMISSION, Respondent

Daniel Alderman seeks review of an order of the Securities and Exchange Commission that affirmed a disciplinary action against him by the National Association of Securities Dealers, Inc. Alderman was an associated person of American Interstate Financial Corp. (AIFC), an NASD member broker/dealer, and was an officer of AIFC’s parent company, Peregrine Holdings, Ltd. He was disciplined for violating Article III, Section 1 of the NASD Rules of Fair Practice by failing promptly to return AIFC client funds that ended up in Peregrine’s account. Alderman contends that the NASD Rule is too vague to be applied to him (and correspondingly, that the SEC and NASD lacked jurisdiction to discipline him) because the failure to reimburse funds occurred in Aider-man’s capacity as an officer of a non-NASD member company and did not arise from the conduct of the business of AIFC, the member firm. We agree with the SEC that wrongfully withholding funds on Peregrine’s behalf that belonged to clients of AIFC, an NASD member firm of which Alderman was a director and control person, was inconsistent with his obligations on behalf of AIFC. As we have jurisdiction, 15 U.S.C. § 78y(a)(l), we uphold the…