==========================================START OF PAGE 1====== UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 38178 / January 16, 1997 SECURITIES INVESTOR PROTECTION ACT OF 1970 Release No. 162 / January 16, 1997 ADMINISTRATIVE PROCEEDING File No. 3-9130 __________________________ In the Matter of : : ORDER MAKING FINDINGS BERNARD ZELENKA : AND IMPOSING REMEDIAL : SANCTIONS BY DEFAULT _________________________: Bernard Zelenka is in default under the Securities and Exchange Commission s ( Commission ) Rules of Practice, Rules 155 and 220(f), 17 C.F.R.  201.155 and .220(f) (1996), because he failed to answer both the Order Instituting Public Proceedings ( Order ) which the Commission issued on September 30, 1996, and the Show Cause Order which I issued on December 13, 1996. Accordingly, I find that the allegations in the Order are true: A. Since August 2, 1995, Bernard Zelenka has served as the president of HL Camp & Co. ( HL Camp ), a broker and dealer registered with the Commission since November 21, 1985. B. During the period from July 1995 through January 1996, Zelenka misappropriated approximately $1,372,069 from at least 28 customers and converted these funds to his personal use. C. Specifically, Zelenka liquidated customers accounts without their knowledge or authorization and had the proceeds wired directly into HL Camp s checking accounts. D. Zelenka converted these funds for his personal use, using such funds for, among other things, repaying loans, satisfying a judgment, purchasing antiques and artwork, and making $165,136 in cash withdrawals. E. To conceal the misappropriation of customer funds, Zelenka prepared false account statements, which he delivered to customers, reflecting false account balances. ==========================================START OF PAGE 2====== 2 F. When questioned about missing funds or unauthorized transactions in customers accounts, Zelenka told customers that HL Camp was changing its clearing firm and that the discrepancies would be cleared up when the transfer was complete. G. To further conceal his scheme, Zelenka disbursed $15,629 in cashier s checks in the guise of purported interest and dividend payments to customers from whom he had misappropriated securities. H. During the period from July 1995 through January 1996, Zelenka willfully violated Section 10(b) of the Securities Exchange Act of 1934 ( Exchange Act ) and Rule 10b-5 thereunder by, directly and indirectly, using the means and instrumentalities of interstate commerce and the mails in connection with the purchase and sale of securities: (1) to employ devices, schemes, and artifices to defraud; (2) to make untrue statements of material facts and to omit to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (3) to engage in acts, practices, and a course of business which operated or would have operated as a fraud and deceit upon HL Camp s customers. I. Zelenka was an officer and director of HL Camp, when, on March 1, 1996, a trustee was appointed for the liquidation of HL Camp. I find further that it is in the public interest to bar Zelenka from association with a broker or dealer pursuant to Section 15(b) of the Exchange Act and Section 14(b) of the Securities Investor Protection Act of 1970 ( SIPA ); bar Zelenka from association with any member of a national securities exchange or registered securities association pursuant to Section 19(h) of the Exchange Act; direct Zelenka to disgorge $1,372,069 plus prejudgment interest of $113,075.80, pursuant to Sections 21B and 21C of the Exchange Act; order Zelenka to pay a civil penalty of $100,000 pursuant to Section 21B of the Exchange Act; and order Zelenka to cease and desist from committing or causing violations and any future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder pursuant to Section 21C of the Exchange Act.1 1 The Division of Enforcement also requested that Zelenka be barred from association with any investment adviser, investment company or municipal securities dealer. I deny the request because I believe the Commission s authority to sanction a ==========================================START OF PAGE 3====== 3 ACCORDINGLY, it is ORDERED that Bernard Zelenka is barred from association with any broker or dealer pursuant to Section 15(b) of the Exchange Act and Section 14(b) of SIPA; ORDERED that Bernard Zelenka is barred from association with any member of a national securities exchange or registered securities association pursuant to Section 19(h) of the Exchange Act; ORDERED that Bernard Zelenka disgorge $1,372,069 plus prejudgment interest of $113,075.80, pursuant to Sections 21B and 21C of the Exchange Act. Such payment shall be: (i) made by United States postal money order, certified check, bank cashier s check, or bank money order; (ii) made payable to the Securities and Exchange Commission; (iii) delivered by hand or courier to the Comptroller, Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549; and (iv) submitted under cover letter which identifies Zelenka as the Respondent in this proceeding, and the file number of these proceedings. The Division of Enforcement shall submit a plan of disgorgement no later than sixty (60) days after Zelenka has turned over the funds; ORDERED that Bernard Zelenka pay a civil penalty of $100,000, pursuant to Section 21B of the Exchange Act. Such payment shall be in the same manner as specified above; and ORDERED that Bernard Zelenka cease and desist from committing or causing violations or any future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder pursuant to Section 21C of the Exchange Act. _________________________ G. Marvin Bober Administrative Law Judge respondent is limited by the language of the sections of the statute cited in the Order.