U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22578 / December 21, 2012
Securities and Exchange Commission v. Lee S. Rosen, Civil Action No. 9:12-CV-81395 (S.D. Fla., filed Dec. 21, 2012)
SEC Charges Former Chairman of Board In Connection With A Fraudulent Plan To Evade The Beneficial Ownership Reporting Requirements
The United States Securities and Exchange Commission (Commission) announced today it filed a civil action against Lee S. Rosen, the former Chairman of the Board of publicly traded New Generation Biofuels Holdings, Inc., alleging that he fraudulently evaded the reporting requirements concerning his ownership interest in New Generation shares held in five separate trusts in violation of the antifraud provisions and beneficial reporting provisions of the federal securities laws. According to the Commission's complaint, at various times from June 2007 through May 2010, Rosen, directly or indirectly profited from the sale of New Generation shares held in two of the five trusts and benefited from using shares in two trusts as payment toward an ultimately unsuccessful purchase of a yacht. The complaint alleges that Rosen received at least $666,000 in direct payments from sales of New Generation stock held in three of the trusts and from a trustee's individual brokerage account. The complaint also alleges that Rosen indirectly benefited from using New Generation shares held in two trusts as partial payment in an effort to purchase a yacht. Further, the complaint alleges that Rosen failed to disclose these transactions and his true holdings in New Generation securities in various Commission filings and that Rosen made false and misleading statements and omissions in Commission filings regarding his true beneficial ownership of New Generation shares.
The SEC's complaint, which was filed in the United States District Court for the Southern District of Florida, charges Rosen with violating Section 17(a) of the Securities Act of 1933, and Sections 10(b), 13(d) and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 13d-1, 13d-2, 16a-3, and 16a-8 thereunder. Rosen has agreed to settle the SEC's charges without admitting or denying the allegations. Rosen consented to a permanent injunction, and an order requiring him to pay $666,000 in disgorgement, plus $50,484 in prejudgment interest, a $195,000 civil money penalty, and barring him from serving as an officer or director.
The SEC's investigation was conducted in the Miami Regional Office by Senior Counsel Jorge L. Riera and Accountant Karaz S. Zaki under the supervision of Assistant Regional Director Elisha L. Frank. Christine Nestor will lead the SEC's litigation.