Investors Bilked In Ground Zero IPO Scam, SEC Alleges
WASHINGTON -(Dow Jones)- A New York firm bilked investors by promising they could double their money in an initial public offering in a firm financing cleanup operations at Ground Zero, regulators said Tuesday.
In a lawsuit filed in federal court in Brooklyn, the SEC sought a temporary restraining order against Ardian Finance Group and its president, Vladislav Tartakovsky, alleging they defrauded investors of $1.2 million since last October.
Tartakovsky, 31, of Fair Lawn, N.J., hired former broker Michael Yeninas, 28, of Queens, to solicit investors in his Long Island City-based firm, the SEC said. Investors allegedly were told they could invest in Ardian at $2 a share and sell it for $5 or more once it went public, even though no IPO was planned.
Ardian claimed to provide financing to companies involved in cleaning up the site of the former World Trade Center towers in downtown Manhattan following the Sept. 11 terrorist attacks, the SEC said.
"Who doesn't want to get in on an IPO?," asked Kay Lackey, assistant regional director in the SEC's New York office. She said investors, many of them elderly, also figured their money would be used for "operations that everybody was happy to support post-9/11."
About 70 investors in 31 states were lured by the offer, according to court documents filed by the SEC.
Ardian, a division of Gourmet Times Ltd., opened last summer and purports to be in the business of providing short-term financing and check-cashing for food industry suppliers.
"This is a viable business, not a fly-by-night investment scam," said Richard Stanley, an attorney for the firm and its president. He said the company has a business plan to provide asset-based financing services and has cooperated fully with the SEC inquiry.
Stanley said claims that Ardian was leasing cranes, bulldozers and earth- moving equipment to contractors at Ground Zero are "not even close" to the firm's legitimate business operations, and were never made by Tartakovsky. Yeninas isn't represented by a lawyer and couldn't be reached immediately for comment.
Ardian's attorney said the firm will provide a full accounting to the SEC. The agency wants to freeze assets held by the company and related parties, obtain a written accounting, and an order barring officers and employees from destroying books and records. The SEC also wants a final judgment ordering the defendants to return their allegedly ill-gotten gains, with interest, and pay civil fines. |
