UNITED STATES OF AMERICA
In the Matter of
LOUIS M. LAZORWITZ
|ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS BY DEFAULT|
The Securities and Exchange Commission ("Commission") issued an order instituting proceedings ("OIP") on September 17, 2002, pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") and Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act"). The OIP alleges that on May 6, 2002, the United States District Court for the Northern District of Georgia permanently enjoined Louis M. Lazorwitz from violating provisions of the securities statutes. Securities and Exchange Commission v. Louis M. Lazorwitz, Civil Action No. 1:02-CV-0112-HTW (N.D.Ga.). Attorney Steven Abramowitz, who was Mr. Lazorwitz's counsel in the civil proceeding, accepted service of the OIP for Mr. Lazorwitz on September 23, 2002. Mr. Abramowitz has engaged in discussions with the Division of Enforcement ("Division") in this proceeding on behalf of Mr. Lazorwitz. A hearing on the allegations is scheduled to begin on October 28, 2002.
Rule 220 of the Commission's Rules of Practice requires that a Respondent file an answer to the allegations in the OIP within twenty days of receipt of the OIP. See 17 C.F.R. § 201.220(b). A respondent who does not file a timely answer may be found in default. See 17 C.F.R. § 201.220(f). Mr. Lazorwitz has not filed an answer. The Division made a filing on October 8, 2002, that included a copy of a facsimile from Mr. Abramowitz dated October 8, 2002, confirming his oral representation that Mr. Lazorwitz "has decided not to answer or appear at the hearing presently scheduled for October 28, 2002." (First Status Report of the Division of Enforcement, Exhibit A.)
Mr. Lazorwitz is in default because he failed to file an answer. I find the following allegations in the OIP to be true pursuant to Rule 155 of the Commission's Rules of Practice. See 17 C.F.R. §§ 201.155.
Mr. Lazorwitz was an associated person of a broker-dealer and an investment adviser from at least August 2001 through November 2001.
On May 6, 2002, the United States District Court for the Northern District of Georgia entered an Order of Permanent Injunction and Other Relief ("Order") against Mr. Lazorwitz in Securities and Exchange Commission v. Louis M. Lazorwitz, Civil Action No. 1:02-CV-0112-HTW (N.D.Ga.). The Order permanently enjoined Mr. Lazorwitz from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b) and 15(a) of the Exchange Act, and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act. The Order directed that Mr. 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 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 Mr. Lazorwitz may not, by way of defense, contend that disgorgement, prejudgment interest, and the civil penalty should not be imposed.
During the period from at least March 1998 until at least September 1999, Mr. 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. Mr. 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 twenty percent per month in so-called thirteen-month trading programs, after an initial ninety-day waiting period. Mr. 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.
Based on these facts, I find it is in the public interest to bar Mr. Lazorwitz from participation in the securities industry as a person associated with a broker or dealer or investment adviser.
I ORDER, pursuant to Sections 15(b)(6) of the Exchange Act and 203(f) of the Advisers Act, that Mr. Lazorwitz be barred from being associated with a broker or dealer or an investment adviser.1
Brenda P. Murray
Chief Administrative Law Judge
|1||The Division indicated in correspondence to the Respondent that it will seek all monetary remedies in the ongoing civil litigation. (First Status Report of the Division of Enforcement, Exhibit B.)|
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