SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 15, 1997
GKN HOLDING CORP.
(Exact name of registrant as specified in its charter)
Commission file number 0-21105
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Delaware 13-3414302
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
61 Broadway, New York, New York 10006
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(Address of principal executive offices) (Zip Code)
(212)509-3800
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(Registrant's telephone number, including area code)
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Item 5. Other Events
On January 15, 1997, GKN Holding Corp.'s primary operating subsidiary, GKN
Securities Corp. (GKN), and Robert Gladstone, Executive Vice President of GKN,
concluded a settlement with the United States Securities and Exchange Commission
(SEC) resolving a long standing and previously disclosed SEC investigation
arising out of customer complaints against ten brokers and alleged related
supervisory failures during 1991 and 1992.
The Offer of Settlement was entered into by GKN and Robert Gladstone, both
without admitting or denying the SEC's findings. Under the terms of the
settlement agreement, GKN will pay a penalty of $100,000 and will engage an
independent consultant to review the firm's supervisory and compliance policies
and procedures. GKN also agreed to implement any recommendations made by the
independent consultant. Robert Gladstone will pay a penalty of $50,000, and is
suspended from all association in any capacity with any broker, dealer,
investment adviser, investment company or municipal securities dealer for a
period of thirty days, and thereafter will not be so associated in a supervisory
capacity for the next eleven months. Mr. Gladstone will remain an officer and
principal stockholder of GKN.
The SEC Order states in its findings that from 1990 through 1992 GKN hired a
large number of registered representatives and that the number of customer
complaints received by GKN rose substantially and included multiple complaints
against certain of the registered representatives. Such complaints included
unauthorized trading in customer accounts and the failure to execute
appropriately customer sale orders. All of GKN's registered representatives
reported to and were supervised by Robert Gladstone. The Order states that GKN
and Robert Gladstone failed to establish adequate supervisory procedures to
monitor the sales practices of the registered representatives during the period
and that they failed to have in place procedures to track customer complaints,
to identify multiple complaints against particular registered representatives
and to adequately respond to the sales practice violations reflected by the
customer complaints. The Order also contains GKN's representation that, since
the latter part of 1992, it has undertaken a number of specific efforts to
improve its supervisory and compliance systems and to maintain these policies
and procedures.
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Signature
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GKN HOLDING CORP.
Date: January 16, 1997 /s/ Peter R. Kent
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Peter R. Kent
Chief Operating Officer and
Chief Financial Officer
