SECURITIES AND EXCHANGE COMMISSION
Litigation Release No.16817 / December 4, 2000
SECURITIES AND EXCHANGE COMMISSION v. SAM M. ANTAR, ET AL., Civil Action No. 93-3988 (HAA) (D.N.J. November 16, 2000)
The Honorable Harold A. Ackerman of the United States District Court for the District of New Jersey issued an order and opinion on November 16, 2000, finding that defendant Sam M. Antar made a series of fraudulent transfers to his spouse, Rose Antar, at times when he was insolvent as a result of the Securities and Exchange Commission's securities-fraud claims against him. The Court held that the Commission was entitled to summary judgment with respect to the transfers and that Rose Antar and two other transferees, the R.A.S. Partnership, L.P. and the S.T. Partnership, L.P., held the transferred assets in constructive trust for the benefit of the Commission. The Court held that a federal court has the jurisdiction to set aside fraudulent transfers in a Commission enforcement action notwithstanding the absence of proof that the transferred assets were originally obtained by securities fraud. Rejecting the defendants' contention that such a "Atraceability" requirement exists, Judge Ackerman stated that the court's jurisdiction over fraudulent transfer claims "is based not only on common sense, but also on centuries of United States Supreme Court precedent."
In a prior opinion, issued on April 27, 2000, the Court found that, in connection with his sales of stock in Crazy Eddie, Inc., Sam M. Antar was liable to the Commission for $15,087,000 in disgorgement plus $42,423,642 in prejudgment interest, for a total of $57,510,642. Sam M. Antar and others had artificially inflated the prices of their Crazy Eddie stock holdings by engaging in an extensive, multifaceted fraud beginning in the 1970s and continuing through 1987 at Crazy Eddie, an electronics retailing chain that at its peak operated forty stores in the greater New York metropolitan area. The fraudulent transferees, who are subject to Judge Ackerman's opinion, are: Rose Antar; the R.A.S. Partnership, L.P., a New Jersey limited partnership in which Rose Antar is the principal partner; and the S.T. Partnership, L.P., a New Jersey limited partnership in which Rose Antar is the principal partner.
Prior Litigation Releases dealing with this and related cases: 16544, 15814, 15251, 15008, 14431, 14053, 14028, 13958, 13776, 13764, 13723, 13649, 13509, 13281, 12995, 12723, 12548, 12356, and 12239.