U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21485 / April 14, 2010
Securities and Exchange Commission v. Gerald Harold Levine, et al., Case No. 2:07-CV-00506 in the United States District Court for the District of Nevada
Court Enters Final Judgment Against Recidivists Gerald H. Levine and Marie A. Levine, As Well As Alan B. Copeland and Nu Star Holdings, Inc.
The Securities and Exchange Commission announced today that on April 7, 2010, Judge Lloyd George of the United States District Court for the District of Nevada entered a final judgment against two securities fraud recidivists, Las Vegas residents Gerald H. Levine and Marie A. Levine, as well as Santa Ana, California resident Alan B. Copeland and Nu Star Holdings, Inc. ("Nu Star"), a company run by the Levines' daughter. The final judgment: (1) enjoins the Levines, Copeland and Nu Star from violating Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, as well as from violating Section 17(a) of the Securities Act of 1933 ("Securities Act"); (2) enjoins the Levines and Nu Star from violating Section 5 of the Securities Act; (3) enjoins the Levines from violating Section 15(b) of the Exchange Act; (4) orders the Levines, Copeland and Nu Star to pay $2,593,712 in disgorgement plus $787,977 in prejudgment interest, for a total of $3,381,689; (5) orders the Levines, Copeland and Nu Star to pay a civil penalty of $120,000; (6) bars the Levines and Copeland from participating in an offer of a penny stock; and (7) bars the Levines from acting as officers or directors of publicly traded companies.
The court issued the final judgment after granting the Commission's motion for summary judgment. In the motion for summary judgment, the Commission argued that from October 1, 2003 through December 31, 2005, the Levines and their associates worked with boiler rooms in Barcelona, Spain and set up their own boiler room in Santa Ana, California to sell various Pink Sheets stocks to innocent, overseas investors. The Levines were assisted in their endeavors by defendant Copeland, who introduced them to the individuals who operated the Barcelona boiler rooms and who assisted in setting up the Santa Ana, California boiler room.
The Commission's motion for summary judgment argued that these defendants made numerous material misrepresentations and omissions in violation of the anti-fraud provisions of the federal securities laws. These misrepresentations and omissions included the following: (a) failing to disclose that the promoters of these stocks had previously been found liable for fraud; (b) failing to disclose that the president of Nu Star had been suspended from the practice of law for three years; (c) failing to disclose to investors the excessive commissions that were paid from the proceeds of the sale of Nu Star stock; (d) misrepresenting the location of the unlicensed brokers who worked in the boiler rooms; and (e) assisting in the preparation of fake "independent" research reports which claimed Nu Star was a stock with a strong upside.
On February 21, 2008, the court entered judgments against defendants Isaac B. Morley and Bruce C. Rothenberg, who settled with the Commission without admitting or denying the allegations against them.
The Commission's action against the remaining defendants is pending.
For further information this action, see Litigation Release No. 20077 (April 18, 2007), http://www.sec.gov/litigation/litreleases/2007/lr20077.htm.
For further information about the SEC's other action against the Levines, please see the following:
Litigation Release No. 20124 (May 22, 2007), http://www.sec.gov/litigation/litreleases/2007/lr20124.htm;
Litigation Release No. 18420 (October 21, 2003), http://www.sec.gov/litigation/litreleases/lr18420.htm;
Litigation Release No. 17139 (September 19, 2001), http://www.sec.gov/litigation/litreleases/lr17139.htm; and
Litigation Release No. 16299 (September 28, 1999), http://www.sec.gov/litigation/litreleases/lr16299.htm.