U.S. SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 46504 / September 17, 2002
File No. 3-10892
PUBLIC PROCEEDINGS INSTITUTED AGAINST LOUIS M. LAZORWITZ
On September 17, 2002, the Commission issued an Order Instituting Public Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940 ("Order") against Louis M. Lazorwitz ("Lazorwitz") of Houston, Texas based on the entry of an Order of Permanent Injunction and Other Relief enjoining him from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The Order of Permanent Injunction and Other Relief directed that Lazorwitz shall pay disgorgement, prejudgment interest thereon, and a civil penalty in amounts to be resolved upon motion of the Commission at a later date. The Order of Permanent Injunction and Other Relief also provided that for purposes of disgorgement, prejudgment interest and the civil penalty, the allegations of the Commission's complaint shall be deemed to be true, and Lazorwitz may not, by way of defense, contend that disgorgement, prejudgment interest and the civil penalty should not be imposed. SEC v. Louis M. Lazorwitz et al., Case No. 1:02-CV-0112-HTW (N.D.Ga.).
The Commission's complaint alleged that, during the period from at least March 1998 until at least September 1999, Lazorwitz, while acting as an investment adviser and broker-dealer, and others, used Tri-Star Investment Group, L.L.C. a/k/a Tri-Star Investment Group ("Tri-Star") to offer and sell securities to over 900 investors in at least 35 states and to raise over $15 million. Tri-Star initially alleged that it would invest in bank debentures typical of prime bank schemes, and later claimed it might invest in other international trade opportunities. Lazorwitz and others promoted Tri-Star directly and through approximately 35 agents around the United States known as "facilitators." Tri-Star promoters led investors to expect profits of 20% per month in so-called 13-month trading programs, after an initial 90-day waiting period. Lazorwitz and others made material misrepresentations and omissions of fact to investors concerning, among other things, the use of investor funds, the expected returns and investment risks, and caused false account statements to be issued to the investors.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Lazorwitz an opportunity to dispute these allegations, and to determine what sanctions, if any, are appropriate and in the public interest.