U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22593 / January 15, 2013
Securities and Exchange Commission v. Andreas Badian, et al., Civil Action No. 06 CV 2621 (LTS) (S.D.N.Y. filed Apr. 4, 2006)
Commission Settles with Four Defendants in Sedona Corporation Market Manipulation Fraud
The Securities and Exchange Commission announced today that on December 19, 2012, the U.S. District Court for the Southern District of New York entered settled final judgments against defendants Andreas Badian, Jeffrey "Danny" Graham, Pond Securities Corporation (Pond), and Ezra Birnbaum in a Commission injunctive action arising from fraudulent manipulative trading in the securities of Sedona Corporation.
Without admitting or denying the allegations in the Commission's complaint, the defendants consented to the following relief: Badian consented to the entry of a judgment enjoining him from future violations of Section 17(a) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act), and Exchange Act Rule 10b-5, and ordering him to pay disgorgement of $375,000, representing ill-gotten gains received as a result of the conduct alleged in the complaint, and a civil penalty of $75,000; Graham consented to the entry of a judgment ordering him to pay a civil penalty of $25,000; Pond consented to the entry of a judgment enjoining it from future violations of Section 17(a) of the Securities Act, Sections 10(b), 15(b), and 17(a) of the Exchange Act, Exchange Act Rules 10b-5, 15b7-1, and 17a-3, NASD Conduct Rule 3010, and a Commission Order issued pursuant to Section 21(a)(1) of the Exchange Act, and ordering it to pay disgorgement of $8,000, representing ill-gotten gains received as a result of the conduct alleged in the complaint, together with prejudgment interest thereon in the amount of $14,822.38, and a civil penalty of $177,177.62; and Birnbaum consented to the entry of a judgment enjoining him from future violations of NASD Conduct Rule 3010.
The Commission's complaint alleged that, from February to April 2001, Badian, Graham, Pond, and others participated in a scheme to manipulate Sedona's stock price. The complaint also alleged that Graham and others aided and abetted violations of the broker-dealer record-keeping requirements through the creation of trade tickets which falsely reported short sales of Sedona stock as "long" sales, and that Pond, Birnbaum, and defendant Shaye Hirsch violated NASD Conduct Rule 3010 by failing to supervise brokers at Pond.
On December 20, 2012, pursuant to its approval of the parties' stipulation of voluntary dismissal, the court entered an order dismissing all claims by the Commission against Hirsch. Defendants Jacob Spinner and Mottes Drillman had settled previously with the Commission. Accordingly, the civil action has been resolved in its entirety.