SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16615 / June 30, 2000
SECURITIES AND EXCHANGE COMMISSION v. MICHAEL BATTERMAN,
The Commission announced today that it filed a Complaint in the United States District Court for the Southern District of New York on June 29, 2000 charging a father and son, and a British Virgin Islands corporation, in connection with a fraudulent scheme to sell the corporation's securities and misappropriate at least $925,000 of investor funds.
Named in the Complaint filed today are:
Michael Batterman ("M. Batterman") who is 67 years old and lives in Hackensack, New Jersey.
Randall B. Batterman III ("R. Batterman") who is 37 years old, lives in New York, New York, and is M. Batterman's son.
Dynasty Fund, Ltd. ("Dynasty") a British Virgin Islands corporation that claims to be an open-end investment management company.
The Complaint alleges that, since at least November 1993, M. Batterman, R. Batterman, and Dynasty fraudulently sold at least $925,000 of Dynasty's securities by promoting M. Batterman as a successful investment adviser with an unblemished record who would manage Dynasty's funds. In fact, M. Batterman had previously pled guilty to two felony counts of federal income tax evasion in 1993, was found by the court in those proceedings to have converted unlawfully $1.5 million in investors' funds for personal use, and was sanctioned in 1976 by the Commission for securities law violations and the New York Stock Exchange ("NYSE") for violation of NYSE rules. In order to conceal their fraud and solicit additional investments in Dynasty, M. Batterman and R. Batterman misrepresented Dynasty's performance. The Complaint also alleges that M. Batterman misappropriated at least $925,000 of investors' funds, and that R. Batterman aided and abetted his father's misappropriation.
As a result of the foregoing, the Commission alleges that M. Batterman, R. Batterman, and Dynasty committed securities fraud in violation of Section 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(a), Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5. The Commission also alleges that M. Batterman violated Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and that R. Batterman aided and abetted M. Batterman's violations of these sections.
The Commission seeks a Final Judgment against M. Batterman, R. Batterman, and Dynasty (i) enjoining them from future violations of the above-cited provisions; (ii) requiring disgorgement of all of the ill-gotten gains as a result of the fraudulent scheme, plus pre-judgment interest; and (iii) assessing civil penalties.
The litigation is pending as to all defendants.