U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22043 / July 15, 2011
Securities & Exchange Commission v. James M. Peister, et al., Civil Action No. 11-CV-3386 (E.D.N.Y.)
On July 14, 2011, the Securities and Exchange Commission filed a settled civil action in the United States District Court for the Eastern District of New York against James M. Peister and Northstar International Group, Inc. (“Northstar”). The Commission’s complaint alleges that, from 2003 through 2009, Peister and Northstar intentionally overstated the assets of the North American Globex Fund, LP (“Globex Fund”) and in so doing they: (1) provided investors and prospective investors with materially false and misleading sales materials claiming an improbable track record of consistent positive monthly returns; (2) issued materially false and misleading account statements to Globex Fund investors; and (3) issued materially false and misleading financial statements. Peister and Northstar engaged in this conduct at a time when the Globex Fund’s actual assets made it impossible to repay all investors either their principal or their share of the purported gain. Furthermore, in order to perpetuate the fraudulent scheme Peister and Northstar continued to solicit new investors.
Peister and Northstar have agreed to settle the Commission’s charges, without admitting or denying the complaint’s allegations. Under the settlement, Peister and Northstar consented to a judgment permanently enjoining them from violating Section 17(a) of the Securities Act of 1933 (“Securities Act”), Section 10(b) of the Securities and Exchange Act (“Exchange Act”) and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 (“Advisers Act”) and Rule 206(4)-8 thereunder. The judgment provides that the amounts of any disgorgement and civil penalties will be determined at a later date.