tonto, this was posted on this thread in July by s. martin. AS Goldmen took WCAP public.
Regards,
Tom
AS Goldmen, Executives Charged With $100 Mln Fraud
Washington, July 8 (Washington) -- A.S. Goldmen & Co., a defunct brokerage, and 33
of its executives and employees were charged by New York or federal authorities with
manipulating small-company public offerings, costing investors $100 million in trading
losses.
Manhattan District Attorney Robert Morgenthau brought criminal charges against New
Jersey-based A.S. Goldmen, its president Anthony J. Marchiano, and a Goldmen
financial principal and former supervisor for the National Association of Securities
Dealers, Stuart E. Winkler, along with a group of former brokers and other employees
of the firm.
Several separate indictments were handed down, covering 240 counts, including
charges of enterprise corruption, scheming to defraud investors, criminal possession of
stolen property and money laundering. The individuals face up to 25 years in prison
each, Morgenthau's office said.
The Securities and Exchange Commission also charged A.S. Goldmen, Marchiano, and
Winkler in a civil administrative case with manipulating shares in at least six initial public
offerings that the brokerage underwrote from 1994 to 1998.
'We will spare no effort to close the doors of 'boiler rooms' that fraudulently peddle
stocks to unsuspecting investors and tarnish the reputation of our capital markets,' said
SEC Enforcement Director Richard Walker.
'Personal Tragedies'
At a press conference in his lower Manhattan office, Morgenthau said, 'A lot of these
losses were personal tragedies for the people involved.' One Maryland couple lost
$400,000, he said, and a woman who had set aside $25,000 for her daughter's
wedding lost it all.
In its heyday, A.S. Goldmen had offices in Manhattan, Naples, Florida, and Iselin, New
Jersey, with nearly 100 brokers and 50,000 accounts, prosecutors said. The firm was
created in 1988 and effectively shut down last fall after authorities searched its offices.
Winkler, who was a field supervisor in the NASD's New York office about 20 years
ago, helped Goldmen conceal its misdeeds from federal and state regulators,
Morgenthau said.
The charges stem from the firm's sale of 10 securities: Millennium Sports Management
Inc., Stadium Capital Inc., Independence Brewing Co., Imatec Ltd., Wanderlust
Interactive Inc., Winfield Capital Corp., Veritas Music Entertainment, Nickelodeon
Theatre Co., Cinema Ride Inc. and Innovative Tech Systems Inc.
'Boiler Room'
In its complaint, the SEC alleged A.S. Goldmen, Marchiano and Winkler sold 3 million
unregistered shares of Millennium Sports, raising $7.5 million for the firm. A.S.
Goldmen's Naples, Florida office then became a 'boiler room' that used aggressive
sales practices to sell the Millennium securities, the SEC alleged.
The SEC also charged six other former brokers who worked in Goldmen's Florida or
New Jersey offices with securities violations. They are John T. Diasabeyagunawardena,
John P. DelCioppo, Christopher M. DelCioppo, Vincent J. Lia, Duane Taylor and
Charles Trento.
'The actions by the SEC and the criminal authorities today were overreaching,' said
Seth Taub, a lawyer representing John DelCioppo. Authorities are seeking to sanction
'many more people' than they'll be able to prove cases against, Taub said.
Lawyers for the firm and other individual defendants either couldn't be reached for
comment or didn't return calls.
According to the SEC, A.S. Goldmen, Marchiano, Winkler and the other brokers
participated in five stock fraud schemes from 1994 to 1998.
One of them involved six IPOs underwritten by A.S. Goldmen, the SEC complaint said.
Winkler placed IPO shares into four nominee accounts, then had A.S. Goldmen
immediately buy those securities after the IPO, making at least $25,000 for the Winkler
nominee accounts, the SEC charged. A.S. Goldmen and Winkler would then resell the
securities to investors at even higher prices, the SEC said.
Hearing Planned
An administrative law judge will hold a hearing to determine whether the SEC
allegations are true and whether sanctions, including fines, are appropriate.
The district attorney also charged A.S. Goldmen's vice president, Salvatore Marchiano,
Anthony Marchiano's brother, and senior brokers Charles Principato, Stephen Kaplan,
John Messina, Michael Cimli and Paul Cimli, among others.
Paul Cimli and another salesman, Paul Colontino, had other people take their licensing
exams for them, Morgenthau said. The 33 people charged by Morgenthau's office
are scheduled to appear today in New York State Supreme Court in Manhattan.
The district attorney's office previously charged two former A.S. Goldmen brokers last
November.
The NASD in May charged the firm, Marchiano, and Winkler with manipulating the
securities of Innovative Tech Systems, a Pennsylvania software company. The firm was
ordered to pay a $150,000 fine and more than $500,000 in restitution to customers.
Marchiano was fined $150,000 together with the firm and Winkler was fined $36,000,
according to the NASD.
Jul/08/1999 19:48
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