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U.S. Securities and Exchange Commission


Litigation Release No. 16181 /June 9, 1999

SEC v. Michael W. Ribant, Civil Action No. 98-CV 2096 IEG (POR) (S.D. Cal.).

The United States Securities and Exchange Commission announced that on May 28, 1999, a permanent injunction and other relief was entered against Michael W. Ribant ("Ribant"), doing business as Trinity Capital, a broker-dealer located in San Diego, California. The Commission filed its complaint against Ribant on November 16, 1998, alleging that Ribant misappropriated approximately $3.3 million of Trinity’s customers’ funds and securities.

Without admitting or denying the allegations contained in the Complaint, Ribant consented to a permanent injunction against future violations of the antifraud provisions, Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment against Ribant orders him to disgorge $3,355,205 plus prejudgment interest and waives payment based upon his demonstrated inability to pay. The judgment does not impose civil penalties based upon Ribant’s demonstrated inability to pay.

According to the complaint, Ribant misappropriated his customers’ funds and securities by selling customers’ securities without the customer’s authorization or knowledge, and then wiring the sale proceeds to accounts that Ribant had opened, also without the customers’ authorization or knowledge, in the customers’ names. To complete the misappropriation, Ribant then, again without the customers’ authorization or knowledge, wired the funds to a bank account held in his own name.

Also on November 16, 1998, in order to afford Ribant’s customers with the protections provided under the Securities Investor Protection Act, the Securities Investor Protection Corporation intervened in the Commission’s action and was appointed trustee over Ribant for the liquidation of Trinity Capital.