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JOHN DAVIS LABELLE, A FORMER REGISTERED REPRESENTATIVE WITH WHEAT FIRST SECURITIES, INC., ENGAGED IN CONDUCT INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE IN THAT HE: 1) MISAPPROPRIATED CUSTOMER BEARER BONDS, 2) MISAPPROPRIATED CUSTOMER BEARER BOND COUPONS, AND 3) COMMINGLED A CUSTOMER'S FUNDS WITH HIS OWN FUNDS -CONSENT TO PERMANENT BAR.

EXCHANGE HEARING PANEL DECISION 89-40

April 13, 1989

An Exchange Hearing Panel met to consider a Stipulation of Facts and Consent to Penalty entered into between the Exchange's Division of Enforcement and John Davis Labelle, a former registered representative with Wheat First Securities, Inc. Without admitting or denying guilt, Labelle consents to a finding by the Hearing Panel that he: I. Engaged in conduct inconsistent with just and equitable principles of trade by misappropriating customer bearer bonds.

II. Engaged in conduct inconsistent with just and equitable principles of trade by misappropriating customer bearer bond coupons. III. Engaged in conduct inconsistent with just and equitable principles of trade in that he commingled a customer's funds with his own funds.

For tile sole purpose of settling this disciplinary proceeding, the Division of Enforcement and Labelle stipulate to certain facts, the substance of which follows: 1. Labelle was born on November 6, 1944. He was first employed in the securities industry as a registered representative in September of 1972 with a mutual fund company that dissolved in 1974. Labelle was next employed in the securities industry with Wheat First Securities, Inc. (the "firm") in March of 1981 and was approved as a registered representative with that firm in July 1981. On October 5, 1987, the Division received a Uniform Termination Notice (U-5) from the firm stating that Labelle's employment had terminated on September 23, 1987. By letter dated November 17, 1987, received by Labelle, the Division advised Labelle that it was investigating a matter which allegedly occurred while he was employed at the firm.

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4.

As a firm registered representative, Labelle serviced the account of Customer A. Customer A's account was covered by a power of attorney held by B, who managed the account.

5.

Customer A's account was opened by Labelle in August 1986 at the instructions of B who had been introduced to Labelle by C who performed accounting services for Customer A.

6.

On August 14, 1986, municipal bearer bonds with the aggregate value of $135,000 belonging to customer A were deposited into the account by Labelle who picked them up from B and delivered them to a firm cashier at a firm branch office for deposit.

7.

Labelle was paid $25,000 in cash by Customer D in November or December of 1986 for the purchase of municipal bonDs. Labelle never deposited the $25,000 cash into Customer D's account.

8.

From January 5 through January 21, 1987, the municipal bonds were delivered from the account by certified mail to B's office. Neither A, B nor C authorized or requested such delivery. On or about February 2, 1987, Labelle picked up the municipal bonds from B at her office. Labelle placed the bonds into an attache case which he put in the trunk of his automobile.

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10.

On February 2, 1987, $25,000 of the municipal bonds were delivered into the firm securities account of Customer D by Labelle.

11.

The remaining $110,000 worth of municipal bonds were kept by Labelle at his home from approximately On August 17, the municipal personal firm February 1987 through early September 1987. 1987, Labelle deposited coupons detached from bonds, in the amount of $3,622.49, in his securities account.

DECISION The Hearing Panel, in accepting the Stipulation of Facts and Consent to Penalty, found Labelle guilty as set forth above by unanimous vote. PENALTY In view of the above findings, the Hearing Panel, by unanimous vote, imposed the penalty consented to by Labelle of a permanent bar from membership, allied membership, approved person status and from employment or association in any capacity with any member or member organization. For the Hearing Panel

John J. Mulcahy, Jr. Chief Hearing Officer