Boiler Rooms' Agree to Pay $2 Mln Penalties, Spitzer Says
12/21/99 15:42 (New York)
N.Y. `Boiler Rooms' Agree to Pay $2 Mln Penalties, Spitzer Says. Operators of two Manhattan
``boiler room' brokerages agreed to pay $2 million in penalties
to settle civil charges they duped 300 investors into buying
shares of non-existing companies, New York Attorney General Eliot
Spitzer said.
In the scam, which ran from mid-1997 through early 1998,
investors were promised returns of 50 percent to 300 percent on
shares of two companies that were said to be going public soon,
Spitzer said. The companies existed only on paper and the
investors typically lost $5,000 to $10,000 each, according to
Spitzer.
Peter Lovaglio, a principal of brokerage J.P. Michaels
Associates, agreed to pay $1 million to settle the case against
him, said Scott Brown, a spokesman for Spitzer. Eighteen other
defendants and seven companies, including Abbey-Ashford
Securities Inc., agreed to penalties of at least $2,000 each,
Brown said.
Most of the money from the penalties will go to compensate
victims, Brown said.
As part of the settlement, the defendants agreed to be
barred from the securities and commodities industries.
Lovaglio couldn't be reached for comment.
Spitzer said the Northeast regional office of the Securities
and Exchange Commission assisted in the investigation.
--Andrew Galvin in New York State Supreme Court (212) 233-2257
through the New York newsroom (212) 318-2300/ep |
