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SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 16658 /AUGUST 18, 2000

SECURITIES EXCHANGE COMMISSION V. TODD J. LASCOLA, ET AL, United States District Court for the District of Rhode Island 98-610-T (December 29,1998)

SEC OBTAINS SUMMARY JUDGMENT AGAINST FORMER BROKER LASCOLA IN $6.3 MILLION SCHEME TO DEFRAUD CUSTOMERS

The Securities and Exchange Commission ("Commission") announced that on June 23, 2000 the United States District Court in Rhode Island granted summary judgment against Todd J. LaScola permanently enjoining him from further violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisors Act of 1940, the general and investment adviser antifraud provisions of the federal securities laws. The judgment also directs LaScola to pay disgorgement in the amount of $6,329,825 plus prejudgment interest and pay a civil monetary penalty of $100,000.

The matter stems from a Complaint, the Commission filed on December 29, 1998, alleging that in November 1988 LaScola, the sole owner of CPI Investment Management, Inc. ("CPI") and a principal and co-owner of CPA Advisors Network, Inc. ("CPA"), diverted over $6 million from client and customer accounts to repay another client, the International Brotherhood of Electrical Workers ("IBEW"), for improper transactions in the IBEW's pension fund account. The Complaint also alleged that LaScola misappropriated $200,000 from an advisory client. Immediately upon filing the Complaint, the Commission sought and obtained temporary restraining orders and asset freezes against LaScola, CPI and CPA. On January 8, 1999,the Court granted the Commission's Motion for Preliminary Injunctions against LaScola, CPI and CPA.

On May 1, 2000, the Commission filed a Motion for Summary Judgement against LaScola. In the Memorandum in Support of the Motion for Summary Judgement, the Commission set forth evidence demonstrating that LaScola had diverted approximately $5.8 million from client and customer accounts to repay the IBEW, received commissions on unauthorized investments totaling $263,900 and misappropriated $200,000 for his own benefit from a client. On June 23, 2000, the Honorable Judge Ernest C. Torres granted the Commission's Motion for Summary Judgement against LaScola.

On July 7, 2000, the Court also granted the Commission's Motion to Dismiss its Compliant against CPI, whose corporate charter had lapsed, and CPA, which is currently controlled by a Securities Investors Protection Corporation Trustee.

For further information, please see Litigation Releases Nos. 16019 (January 11, 1999) and 16012 (December 30, 1998).

http://www.sec.gov/litigation/litreleases/lr16658.htm


Modified:08/22/2000