MAGNUM ALSO FEATURED INDICTED RUBIN INVESTMENT GROUP RESEARCH REPORTS. LOL web.archive.org
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The Ides of March Prove Brutish for Rubin
by Hartley Bernstein - Stockpatrol Editor
Daniel Rubin, CEO of Rubin Investment Group has been named in a new criminal indictment charging him with manipulating the securities of four public companies, including Augrid Corporation.
March 28, 2004 (AXcess News/StockPatrol) Daniel Rubin, CEO of Rubin Investment Group has been named in a new criminal indictment charging him with manipulating the securities of four public companies, including Augrid Corporation (OTCBB: AGDR).
Daniel Rubin, the investment banker who once captured attention as a millionaire playboy broker, is a target of prosecutors once again. Rubin is the Chief Executive Officer of Rubin Investment Group, an investment bank with offices in Los Angeles, New York City and Lake Helen, Florida. His latest problems surfaced on March 15, 2004, when the United States Attorney for the Eastern District of New York announced that Rubin and three of his associates had been charged with conspiracy to defraud investors in four public companies.
Rubin was already facing criminal charges filed in October 2003. The earlier complaint alleged that Rubin and three others engaged in securities fraud by orchestrating a pump and dump scheme involving shares of two tiny public companies Marx Toys & Entertainment Group (OTCBB: MRXT) and The Classica Group (Pink Sheets: TCGI). See Feds Say Rubin's Been Robbin.
Those manipulative activities represent just one aspect of the present criminal proceeding against Rubin and his cohorts, who also have been charged with scheming to defraud investors in two more public companies, 1-800-Attorney, Inc. (Pink Sheets: ATTY) and Augrid Corporation (OTCBB: AGRD).
StockPatrol.com originally reported on Rubin's relationship with Augrid in a series of articles published in October 2003. See Augrid Corporation, Part I - Another Rubin-esque Venture?; Part II - S-8's Are Us; Part III - Is New Major Shareholder a Major Headache?; and Part IV - Does Activity Equal Action? At the time we noted that Rubin had received options to purchase 50 million shares of Augrid common stock at .01 cent a share and another 200 million shares of Augrid common stock at .005 cents a share - all in consideration for vaguely described "consulting services."
The latest indictment alleges that a team of cold callers, operating from Rubin's Lake Helen, Florida office, induced small-cap companies or their major shareholders to sell large blocks of stock to the Rubin Investment Group at discounted prices. Their sales pitch allegedly was riddled with misrepresentations. Using scripts prepared by two of Rubin's co-defendants, cold callers allegedly exaggerated the credentials of the Rubin Investment Group, claiming that it had a large base of brokers and managed funds for some 3,000 doctors and dentists. In truth, the Rubin Investment Group had no brokers and managed nominal amounts for just a handful of individuals.
Prosecutors charge that, after acquiring blocks of stock in small-cap companies, Rubin engaged in fraudulent and manipulative practices to boost stock prices. Augrid was one case in point. After acquiring a block of Augrid stock from the Company in July 2003 (for purported consulting services), the Rubin insisted that the Company accept $1 million less than the negotiated purchase price for the shares. Then, to create the illusion of market interest in the Company's stock, Rubin traded over 100 million Augrid shares from one brokerage account he controlled to another of his accounts. As a result of that "wash sale" Augrid's stock price increased by over 40%, enabling Rubin to dump his shares at a profit of approximately $2.3 million.
According to the indictment, this was just one example of Rubin's manipulative conduct. In October 2002, he purportedly induced 1-800-Attorney, Inc., an attorney referral service located in Lake Helen, to appoint him as its CEO and issue him approximately 3.2 million shares in return for his promise to invest over $1.2 million in the company. Rubin never made that investment. Instead, he purchased additional shares of 1-800-Attorney stock on the open market and then allegedly utilized manipulative practices to drive the stock price upward, from about 70 cents to over $7.00 in less than two months. Once again, Rubin sold his shares at the inflated prices.
Tracking the allegations of the earlier complaint, the indictment also charges that the Rubin Investment Group worked with Classica CEO Scott Halperin to manipulate the value of Classica and Marx Toys stock. Rubin's company allegedly received shares of Classica and Marx Toys at a discount in return for fraudulently inflating the stock prices.
Rubin has been charged with securities fraud, as well as conspiracy to commit securities fraud, mail fraud and conspiracy to commit money laundering. The securities fraud conspiracy and substantive securities fraud charges each carry a maximum prison sentence of 25 years and a fine of $250,000, or twice the gain or loss caused by the fraud, whichever is greater. The mail fraud count carries a maximum prison sentence of 20 years and a fine of $250,000, or twice the gain or loss caused by the fraud, whichever is greater. The money laundering count carries a maximum prison sentence of 20 years and a fine of $500,000 or twice the value of the laundered property.
The government is also seeking forfeiture of $3.4 million, representing a portion of the profits from the illegal schemes, as well approximately 3.2 million shares of 1-800-Attorney stock.
Do you suppose he will be using 1-800-Attorney to find a criminal lawyer?
©2004 Stock Patrol.com. All rights reserved.
Hartley Bernstein is a freelance financial writer living in New York and the editor of Stockpatrol. Visit Hartley's website if you would like to read more "watchdog" type financial stories from this accomplished author.
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