Unrelated news from todays SEC digest.
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TWO OWNERS OF MANHATTAN BROKERAGE FIRM, OTHERS, SENTENCED ON CRIMINAL FRAUD
CHARGES
The Commission announced that on March 16 J. P. Gibbons & Co., Inc., a
Manhattan brokerage firm formerly known as The Golden Lender Financial
Group, Inc. (Golden Lender); Aron O. Bronstein and Tomer M. Yuzary, co-
founders and principal owners of Golden Lender; and Roman Sakharovich,
a/k/a Roman Sakh, and Iosif Pak, a/k/a Joseph Pak, registered
representatives of Golden Lender, were sentenced on criminal charges
arising out of a fraudulent offering of Golden Lender stock. United
States District Judge Michael B. Mukasey sentenced Bronstein and Yuzary
each to three years and ten months in prison, Sakh to three years and
five months in prison, and Pak to three years in prison. Judge Mukasey
also ordered that Golden Lender be dissolved and that the other
defendants liquidate their assets and pay restitution to the victims of
the fraud in the amount of $3,209,000. The individual defendants had
previously pleaded guilty to charges of conspiracy and securities fraud;
Golden Lender had previously pleaded guilty to charges of securities
fraud. The criminal case was prosecuted by the Office of the United
States Attorney for the Southern District of New York.
The Commission previously instituted a civil action against the
defendants, based on the same conduct underlying the criminal charges.
The Commission's complaint charges that, from January 1998 through
November 1999, the defendants raised at least $5,270,000 in a
fraudulent, unregistered offering of Golden Lender stock. The complaint
alleges that, acting at Bronstein and Yuzary's direction, Sakh and Pak
sold Golden Lender stock to retail customers (including many elderly and
infirm customers of modest means) using a high pressure sales pitch that
included numerous material misrepresentations and omissions. Among the
misrepresentations and omissions allegedly used by the defendants to
induce investors to part with their savings are the following:
False representations that Golden Lender would soon conduct an
initial public offering and that investors would reap large
profits once the firm went public;
Failure to inform investors of the risks associated with
investing in Golden Lender, including Golden Lender's precarious
financial condition; and
Concealment of exorbitant payments to Bronstein and Yuzary drawn
from investor funds.
The complaint further alleges that the defendants recommended and sold
Golden Lender stock to numerous investors for whom it was clearly
unsuitable, including retirees who invested large portions of their
modest retirement funds.
The Commission's action, which alleges that the defendants violated
Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section
10(b) and 15(c) of the Securities Exchange Act of 1934 and Rules l0b-3,
I0b-5, and 15c1-2 thereunder, Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 thereunder, is pending in the United States
District Court, Southern District of New York (SEC v. Aron O. Bronstein,
et al., 00 Civ. 1179, SDNY, LAK). For further information, see
Litigation Release 16441. [U.S. v. Aron O. Bronstein, et al., 00 CR
1179, USDC, SDNY, MBM] (LR-16936)
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