UNITED STATES OF AMERICA
In the Matter of
GARRY P. ISAACS
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest to institute public administrative proceedings pursuant to Sections 15(b) and 19(h) of the Securities Exchange Act of 1934 ("Exchange Act") against Respondent Garry P. Isaacs ("Isaacs").
In anticipation of the institution of these proceedings, Respondent Isaacs submitted an Offer of Settlement ("Offer") to the Commission, which the Commission has determined to accept. Solely for the purpose of this proceeding and any other proceeding brought by or on behalf of the Commission, or in which the Commission is a party, and without admitting or denying the findings contained herein, except as to the jurisdiction of the Commission over Respondent Isaacs and over the subject matter of this proceeding and with respect to Section III., paragraphs 1. and 4., below, which is admitted, by his Offer to consent to the entry of findings and remedial sanctions set forth below.
Accordingly, IT IS ORDERED that proceedings pursuant to Sections 15(b) and 19(h) of the Exchange Act be, and, they hereby are, instituted.
On the basis of this Order and the Offer submitted by Respondent Isaacs, the Commission finds that:
1. During the period of April 1997 through January 1999, Respondent Isaacs was associated with Tamarack Financial, Inc., a registered broker-dealer, as its principal and sole shareholder.
2. On May 31, 2000, the Commission filed a complaint ("Complaint") in the United States District Court for the Southern District of Florida, SEC v. Tamarack Funding Corp., et al., No. 00-6730-CIV-HUCK (S.D. Fla.). The Complaint charged Respondent Isaacs with violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
3. The Commission's Complaint alleged, among other things, that Tamarack Funding Corp., a Texas corporation, Tamarack Funding Corp., a Florida corporation (collectively "TFC"), and Isaacs fraudulently raised approximately $4.7 million from at least 125 investors nationwide through an unregistered offering involving interest-bearing "promissory notes." Specifically, the Complaint alleged that from July 1995 to February 2000, TFC and Isaacs knowingly or recklessly made material false and misleading representations in the offer and sale of the "promissory notes" to the investing public. According to the Complaint, investors in the offering were told that their funds would be used to purchase retail automobile installment loan contracts ("vehicle loans") and that their investment would be 100% collateralized. Contrary to these representations, the Complaint alleged that the investment was not 100% collateralized and that only $1.4 million of investor funds was actually used by TFC and Isaacs to purchase vehicle loans. According to the Complaint, unbeknownst to investors, the remaining investor funds were used to pay TFC's operating costs and unrelated expenses. The Complaint further alleged that TFC used some of the monies received from new investors to repay interest to existing investors and was thereby engaged in a Ponzi scheme.
4. On September 20, 2000, the District Court entered a final judgment of permanent injunction and other relief by consent against Respondent Isaacs, permanently enjoining him from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
Based on the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified by Respondent Isaacs in his Offer.
Accordingly, IT IS ORDERED that Respondent Isaacs be, and hereby is, barred from association with any broker or dealer.
By the Commission.
Jonathan G. Katz
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