U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20921 / March 3, 2009
Securities and Exchange Commission v. Stephen L. Hochberg, (United States District Court for the District of Massachusetts, Civil Action No. 08-10848-DPW)
Final Judgment Entered Against Former Massachusetts Money Manger Charged With Fraud
The Securities and Exchange Commission today announced that on March 2, 2009, a final judgment by consent was entered by the United States District Court Judge for the District of Massachusetts against Stephen L. Hochberg. Hochberg, age 60, was a resident of Sudbury, Massachusetts, and is now serving a 63 month prison sentence. The final judgment against Hochberg permanently enjoins him from violating the antifraud provisions of the federal securities laws, and orders that Hochberg is prohibited from acting as an officer or director of any public company.
The Commission's civil injunctive complaint against Hochberg, filed on May 21, 2008, alleged that Hochberg obtained at least $1.6 million from seven investors for a purported real estate investment fund, Realty Funding LLC, that did not exist. The Commission's complaint also alleged that Hochberg obtained $150,000 from an elderly widow on fixed income for a purported investment in Massachusetts municipal bonds. According to the Commission's complaint, in both schemes, Hochberg, an accountant turned business consultant and unregistered investment adviser, never invested any funds and used most of the investor funds to pay his debts, to make payments to past investors or others who were threatening to sue or had sued him, and to pay various personal expenses, including payments to lawyers, credit card companies, and car payments.
In a related criminal matter, on June 13, 2008, Hochberg pled guilty to eight counts of wire fraud and nine counts of securities fraud in a plea agreement with the U.S. Attorney's Office in Boston, Massachusetts. On October 16, 2008, the federal court in Massachusetts sentenced Hochberg to serve 63 months imprisonment followed by three years of supervised release, and to pay restitution in the amount of $1,791,500.
On June 30, 2008, in a separate administrative action, the Commission issued, based on Hochberg's criminal plea, an order by consent barring Hochberg from association with any investment adviser. Also, on November 25, 2008, based on Hochberg's felony conviction, the Commission issued an Order of Forthwith Suspension Pursuant to Rule 102(e)(2) of the Commission's Rules of Practice, suspending Hochberg from appearing or practicing before the Commission as an accountant.
For further information, please see Litigation Release Nos. 20591 (May 21, 2008), 20619 (June 16, 2008), 20786 (October 20, 2008), Securities Exchange Act of 1934 Release No. 59018 (November 25, 2008), and Investment Advisors Act of 1940 Release No. 2749 (June 30, 2008).