The SEC Feb. 10 for the first time cracked down on a brokerage firm for aiding and abetting a money manager in misusing soft dollar credits that rightly belonged to the investment advisers clients. The SEC reached a settlement in charges against Republic New York Securities and its president, James Edward Sweeney, for its role in defrauding clients of Sweeney Capital. Mr. Sweeney and Sweeney Capital are unrelated. The case was prompted by the SECs soft dollar sweep exams. Under the settlement, Mr. Sweeney and Republic Securities agreed to pay $25,000 and $50,000 in fines, respectively, to be censured and to stop those activities immediately. Sweeney Capital traded securities through Republic and received $1 in soft dollar credits for every $1.75 in trades it placed through the brokerage firm. But the SEC found that Sweeney Capital Management misappropriated $84,000 in soft dollar rebates generated by trades through Republic Securities between May 1994 and April 1995. Republic Securities paid for the money management firms telephone, accounting and legal bills, furniture, rent, parking, office supplies and other business expenses with the soft dollar credits generated. Sweeney Capital had $2 million in assets under management, and was also the investment adviser and general partner to a hedge fund with 10 investors, according to David B. Bayless, the head of the SECs San Francisco office.