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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22525 / November 1, 2012

SEC v. Adam Bielski, (United States District Court for the District of Massachusetts, 12-MBD-91330-NMG-LTS)

Commission Files Subpoena Enforcement Action Against Adam Bielski

The Securities and Exchange Commission announced today that it filed an application on October 24, 2012 in the United States District Court for the District of Massachusetts for an order to enforce an investigative subpoena served on Adam Bielski (“Bielski”) of Uxbridge, Massachusetts. On October 30, 2012, the District Court ordered Bielski to show cause why he should not comply with the Commission’s subpoena and scheduled a hearing on the Commission’s application for November 9, 2012.

The Commission's application and supporting papers allege that, on August 2, 2012, the Commission issued a formal order of private investigation authorizing its staff to investigate, among other things, potential compliance and security deficiencies at a Massachusetts-based investment adviser (the “IA”) registered with the Commission. In particular, the staff is investigating whether the IA’s compliance and security policies and procedures were reasonably designed to protect against recent instances of attempted and actual theft of client assets managed by the IA. One such incident involved an attempt by an apparent hacker to cause the IA to wire client funds to Bielski’s bank account with Savers Bank in Uxbridge. On August 31, 2012, the Commission issued an investigative subpoena to Bielski. The subpoena required Bielski to produce documents relevant to the investigation and to appear before the Commission staff for testimony. The Commission alleges that, despite extending the subpoena’s return date to accommodate Bielski and assurances by Bielski that he would comply with the subpoena, Bielski has failed to produce many of the responsive documents in his possession as of the date of the Commission’s application. According to the Commission's application, Bielski does not have a credible justification for his failure to comply with the subpoena, and a court order is necessary to compel him to produce the subpoenaed documents and to appear for testimony.

The Commission alleges that, in voluntary interviews with Commission staff, Bielski described having a six-year long association with a woman, Faith Collins (“Collins”), whom Bielski communicates with exclusively through the internet and has never met in person. According to the Commission’s application and supporting papers, Bielski admitted to the staff that on at least one occasion, in or around June 2012, Collins caused funds to be wired into his Uxbridge bank account, although he denies having any involvement in obtaining the money or knowledge about its origin. Bielski reported that Collins at another point attempted to wire more funds into his bank account, but was thwarted when the broker-dealer custodian of the assets contacted him to alert him that someone (whom Bielski understood to be Collins) was attempting to wire stolen money to him. Bielski has not yet explained why Collins was attempting to wire money to him, other than to say that she needed the money for business reasons. Bielski also informed the staff that Collins resides in Nigeria and that he (and other individuals in the U.S.) provide financial assistance to her.

A hearing on the Commission's application has been scheduled for November 9, 2012.

 

http://www.sec.gov/litigation/litreleases/2012/lr22525.htm


Modified: 11/01/2012