UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Investment Advisers Act of 1940
Investment Company Act of 1940
SEC INSTITUTES ADMINISTRATIVE PROCEEDING AGAINST MUMTAZ SAXENA BASED ON ENTRY OF INJUNCTION
The Securities and Exchange Commission announced today that it instituted an administrative proceeding against Mumtaz Saxena based on the entry of an injunction prohibiting her from violating the antifraud and registration provisions of the federal securities laws.
In the Order, the Division of Enforcement alleges that, on July 25, 2000, Saxena and her husband were permanently enjoined by the District Court for the District of Massachusetts from violating the registration and antifraud provisions of the federal securities laws. The Division also alleges that, in addition to permanent injunctions, the District Court judgment directed Saxena to disgorge jointly and severally with her husband the sum of $277,547 plus prejudgment interest in the amount of $49,809. In addition, Saxena was directed to pay civil monetary penalties in the amount of $50,000.
The Commission's complaint in the injunctive proceeding, filed on September 18, 1998, alleged that, between October 1995 and August 1996, Saxena and her husband established an investment adviser, Saxena Capital Management, and two investment companies, Index Timing Fund and Saxena Growth Fund. The complaint alleged that Saxena sold unregistered interests in the investment companies and made material misrepresentations and omissions to investors. The complaint further alleged that Saxena and her husband established the investment adviser and investment companies to evade an order previously entered by the Commission barring Saxena's husband from the securities industry. The Commission's complaint alleged that although Saxena nominally was the principal of these entities, Saxena's husband was actively involved with all of them from the outset and that the funds' investment decisions tracked recommendations in newsletters that Saxena's husband published via an Internet website entitled "Vital Information." Accordingly, the Complaint alleged that Saxena and her husband violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The civil action was captioned SEC v. Sanjay Saxena and Mumtaz Saxena, Civil Action No. 98-11918-EFH.
A hearing will be held before an administrative law judge to determine whether the Division's allegations against Saxena are true, and if so, whether remedial sanctions are appropriate and in the public interest.http://www.sec.gov/litigation/admin/ia-1899.htm