SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16894 \ February 8, 2001
SECURITIES AND EXCHANGE COMMISSION v. ALEXIS A. ARLETT, et al. (United States District Court, D.N.J., Civil Action No. 01-621) (AET)
The Securities and Exchange Commission ("Commission") announced the filing, on February 8, 2001, of a Complaint in the United States District Court for the District of New Jersey, alleging that defendants Arlett and Associates, Inc. ("Arlett and Associates"), an investment adviser registered in New Jersey, and Alexis A. Arlett ("Arlett"), of Skillman, New Jersey, its president and owner, misappropriated approximately $4.1 million from their advisory clients. The Complaint also names as a relief defendant Michael H. Kochmann ("Kochmann"), Arlett's husband, alleging that Arlett deposited a portion of the stolen funds into a bank account jointly owned by Arlett and Kochmann.
The Complaint seeks permanent injunctions, disgorgement and civil penalties from Arlett and Associates and Arlett; and disgorgement from Kochmann. Kochmann is not charged with violating any of the provisions of the federal securities laws. Without admitting or denying the Commission's allegations, Arlett and Associates and Arlett consented to the entry of an Order of Permanent Injunction (Reserving the Issues of Disgorgement and Civil Penalties) permanently enjoining them from violating 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 Advisers Act of 1940. In addition, Arlett and Associates, Arlett and Kochmann consented to the entry of an order freezing their assets and granting other relief.