UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO.16204 / July 7, 1999
DEFAULT JUDGMENT ENTERED AGAINST DEFENDANTS IN FRAUD CONCERNING NICHI CAPITAL, LTD.
SECURITIES AND EXCHANGE COMMISSION V. NICHI CAPITAL, LTD., WISE CHOICE DISCOUNT BROKERAGE, INC., OLAWANDE A. AGUNLOYE, AND BRIAN WALFISH, 98-CIV-2218 (S.D.N.Y.)
The Securities and Exchange Commission ("Commission") announced that, on June 30, 1999, the United States District Court for the Southern District of New York entered a Final Judgment by Default against Nichi Capital, Ltd. ("Nichi"), Wise Choice Discount Brokerage, Inc. ("Wise Choice"), Olawande A. Agunloye ("Agunloye"), and Brian Walfish ("Walfish"). The order permanently restrains and enjoins the defendants from violating certain antifraud and registration provisions of the securities laws. In particular, each defendant was enjoined from violating Sections 5(a) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934, and Rules 10b-5 and 10b-9 thereunder. The order also requires Nichi, Wise Choice, Agunloye, and Walfish, jointly and severally, to disgorge $1,004,165.05 and imposes a civil penalty of $10,000 on each of the defendants.
The order arises from a Complaint filed March 27, 1998. The Complaint alleged, among other things, that beginning in approximately October 1997, the defendants fraudulently offered and sold shares of Nichi securities to investors both in a private placement and in an initial public offering ("IPO"). The Nichi securities were not registered with the Commission, nor were they exempt from registration under the federal securities laws. The defendants induced investments in Nichi securities by a series of misrepresentations. These misrepresentations included false claims that an IPO of Nichi stock was about to take place, that the shares purchased would greatly increase in value once Nichi's IPO was completed, and that the investors' money would be placed in an escrow account until the IPO took place. On March 31, 1998, the Court issued a temporary restraining order against the defendants and ordered an asset freeze against Nichi, Wise Choice, and Agunloye. On May 12, 1998, the Court continued the asset freeze, preliminarily enjoined the defendants from violating the antifraud provisions and registration provisions of the federal securities laws, and ordered each of the defendants to provide an accounting.
See also Litigation Release Nos. 15688, 15740, and 15796.