8/12/2019 89-117

1/2

N E W Y O R K S T O C K E X C H A N G E, I N C.

MICHAEL ALAN SALSMAN A FORMER REGISTERED REPRESENTATIVEWITH MERRILL LYNCH, PIERCE, FENNER & SMITH, INC., ENGAGEDIN CONDUCT INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLESOF TRADE IN THAT HE EFFECTED AN EXCESSIVE AMOUNT OF TRADINGIN THE ACCOUNT OF A CUSTOMER -- CENSURE AND A THREE WEEKBAR.

EXCHANGE HEARING PANEL DECISION 89-117

December 14, 1989

An Exchange Hearing Panel met to consider a Stipulation of

Facts and Consent to Penalty entered into between the Exchange'sDivision of Enforcement and Michael Alan Salsman. Without admittingor denying guilt, Salsman consents to a finding by the Hearing Panelthat he engaged in conduct inconsistent with just and equitableprinciples of trade in that he effected an excessive amount oftrading in the account of a customer.

For the sole purpose of settling this disciplinaryproceeding, the Division of Enforcement and Salsman stipulate tocertain facts, the substance of which follows:

1. Salsman was born on March 1, 1954. He enteredthe securities industry on April 4, 1981 with Merrill

Lynch, Pierce, Fenner & Smith, Inc. (the firm) and wasapproved as a registered representative with the firmeffective August 21, 1981. Salsman was continuouslyemployed by the firm until his resignation on July 25,1989. The instant complaint is the only one filedagainst Salsman as a registered representative.

2. This investigation was commenced after a referralof a customer complaint from the Securities andExchange Commission, Atlanta Regional Office.

3. On or about May 28, 1983, Salsman opened an account forCustomer A ("the Account"). The Account was a margin accountwhich was maintained for 13 months, from May 1983 through

June 1984.

4. The new account form completed by Salsman for the Accountreported that Customer A was a sixty-two year old retiredapartment manager with an annual yearly income of $20,000 andnet worth of $175,000. The form further described CustomerA's investment objectives as long term and intermediate priceappreciation. The risk factors indicated were investmentgrade and speculative.

8/12/2019 89-117

2/2

2

5. On June 10, 1983, a $3,169.73 debit balance, as well asshares with a market value of $23,925 were transferred to theAccount from a joint account previously maintained bycustomer A and her daughter.

6. The purchases during the 13 month life of the Account totalled $230,050.13. The average monthly equity (AME) was$11,573.62. During the 13 month life of the Account the AMEwas turned over 19.88 times or 18.35 times on an annualbasis.

7. The total production credits paid to the firm based upon theactivity in the Account during its 13 month life were $9,326.Of this amount, $7,007 arose from the 1983 transactions and$2,319 arose from the 1984 transactions.

8. Prior to the opening of a related family account in lateNovember 1982, Customer A had no investment experience. Herinvestment objective was the preservation of capital forretirement.

9. The transactions which occurred in the Account were, for themost part, based upon recommendations made by Salsman.

10. The losses in the Account both realized and unrealizedtotalled approximately $11,700. The firm settled CustomerA's claim for $8,000.

DECISION

The Hearing Panel, in accepting the Stipulation of Facts andConsent to Penalty, found Salsman guilty as set forth above byunanimous vote.

PENALTY

In view of the above findings, the Hearing Panel, byunanimous vote, imposed the penalty consented to by Salsman of acensure and a bar from membership, allied membership, or approvedperson status, and from employment or association with a member ormember organization for three weeks.

For the Hearing Panel

James F. Swartz, Jr.Hearing Officer