U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22012 / June 22, 2011

Securities and Exchange Commission v. Radical Bunny, LLC, Tom Hirsch, Berta Walder, Howard Walder, and Harish Shah, United States District Court for the District of Arizona, Case No. 2:09-cv-01560-SRB (July 28, 2009).

COURT ISSUES AN ORDER TO SHOW CAUSE RE CIVIL CONTEMPT BASED ON DEFENDANTS' FAILURE TO PAY DISGORGEMENT AND PREJUDGMENT INTEREST

On June 21, 2011, the United States District Court for the District of Arizona issued an Order to Show Cause re Civil Contempt against defendants Tom Hirsch, Berta Walder, Howard Walder, and Harish P. Shah for their failure to pay disgorgement and prejudgment interest thereon as required by the Final Judgment of Permanent Injunction and Monetary Relief entered by the Court against the defendants.

The Court's Order follows from the Commission's Motion for Order to Show Cause re Civil Contempt against the defendants, filed June 10, 2011, which alleged that the defendants violated the Court's Final Judgment by failing to pay disgorgement (Hirsch was ordered to disgorge $1,245,220, the Walders $1,245,217, and Shah $740,160) and prejudgment interest thereon within 14 days of the entry of the Final Judgment. The Court granted the motion and issued the Order to Show Cause on June 21, 2011. The hearing on the Order to Show Cause is set for July 28, 2011.

The Commission's complaint, which was filed on July 28, 2009, alleged that the defendants and their company, Radical Bunny LLC, raised $197 million from investors nationwide and that they made a series of misrepresentations and omissions to investors about the safety and security of the investment and the applicability of the securities laws to their offering. In particular, the complaint alleged that the defendants falsely represented that Radical Bunny held a secured interest in real estate and/or Mortgages Ltd.'s assets even after their attorneys repeatedly advised them that documentation of that security interest was either non-existent or defective.

The Commission's motion for summary judgment against the defendants was granted on April 12, 2011. The Final Judgment against the defendants was entered by the Court on April 28, 2011.

For further information, see Litigation Release Nos. 21157 (July 28, 2009) and 21952 (May 2, 2011), and Administrative Proceedings 34-64507 (May 17, 2011).