Jacko Law Group, PC
Call Today for a Consultation
San Diego 619-298-2880 San Francisco 415-766-3599 Los Angeles 213-631-2549

New York Attorney Charged with Shell Company Stock Fraud

sec-ny-attorney Last week the U. S. Securities and Exchange Commission judged that David Lubin, a New York-based attorney, may no longer appear or practice before the SEC, and may no longer act as an officer or director of a public company. He was charged with making false and misleading statements in corporate filings.

The SEC stated in a press release that Lubin committed fraud while both a director and corporate counsel of Entertainment Art, a public company in which he was also a large shareholder.

Per the SEC's order, when the company was renamed Biozoom, over 14 million shares were resold to the public in an illegal unregistered distribution with illicit proceeds of $34 million. Seven defendants, including the buyer of Entertainment Art, have been charged thus far. Lubin also is facing separate criminal charges filed by prosecutors in Miami that claim he conspired to fraudulently register shell companies with the SEC, issue shares in the companies that shell investors secretly controlled, and sell the shares to the investing public at a profit.

Antonia Chion, Associate Director in the SEC's Enforcement Division, provided this statement: "As the SEC's order notes, Lubin drafted and signed misleading public filings and masked the true ownership and restricted nature of a significant portion of the company's stock.  Lubin's deception led to many of these same shares being illegally resold to the general public by others a few years later."

According to the SEC's order, Lubin intentionally and willfully violated Section 10(b) of the Securities Exchange Act and Rule 10b-5.  The SEC imposed a cease-and-desist order and an officer-and-director bar.  The order also prohibits Lubin from representing clients in SEC matters, including investigations, litigation, or examinations, and from advising clients about SEC filing obligations or content.

As we have seen with this case and others like it, securities fraud violations are not tolerated. Therefore, it is imperative for firms to proactively review corporate filings and further investigate whether any activities appear to circumvent federal securities laws. Jacko Law Group, PC can help financial firms develop and evaluate internal controls that will help detect and prevent such violations before they occur.  For more information, please contact one of our securities attorneys at 619.298.2880 or at info@jackolg.com.

No Comments

Leave a comment
Comment Information
Email Us For A Response

How Can We Help?

Email us to request more information or to schedule an appointment.

Bold labels are required.

Contact Information
disclaimer.

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.

close

Privacy Policy

San Diego Office
1350 Columbia Street
Suite 300
San Diego, CA 92101

Toll Free: 866-497-2298
Phone: 213-631-2549
Phone: 619-298-2880
Fax: 619-298-2882
Map & Directions

San Francisco Office
Four Embarcadero Center
Suite 1400
San Francisco, CA 94111

Phone: 213-631-2549
Phone: 415-766-3599
Fax: 619-298-2882
Map & Directions

Los Angeles Office
535 N. Brand Boulevard
Suite 279
Glendale, CA 91203

Phone: 213-631-2549
Fax: 619-298-2882
Map & Directions