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U.S. Securities and Exchange Commission


Litigation Release No. 16936 / March 21, 2001

UNITED STATES V. ARON OLEG BRONSTEIN, ET. AL., U.S. District Court, S.D.N.Y., No. 00-CR-1179 (MBM)


The Securities and Exchange Commission ("Commission") announced that on March 16, 2001, J. P. Gibbons & Co., Inc., a Manhattan brokerage firm formerly known as The Golden Lender Financial Group, Inc. ("Golden Lender"); Aron O. Bronstein and Tomer M. Yuzary, co-founders and principal owners of Golden Lender; and Roman Sakharovich, a/k/a Roman Sakh, and Iosif Pak, a/k/a Joseph Pak, registered representatives of Golden Lender, were sentenced on criminal charges arising out of a fraudulent offering of Golden Lender stock. United States District Judge Michael B. Mukasey sentenced Bronstein and Yuzary each to three years and ten months in prison, Sakh to three years and five months in prison, and Pak to three years in prison. Judge Mukasey also ordered that Golden Lender be dissolved and that the other defendants liquidate their assets and pay restitution to the victims of the fraud in the amount of $3,209,000. The individual defendants had previously pleaded guilty to charges of conspiracy and securities fraud; Golden Lender had previously pleaded guilty to charges of securities fraud. The criminal case was prosecuted by the Office of the United States Attorney for the Southern District of New York.

The Commission previously instituted a civil action against the defendants, SEC v. Aron O. Bronstein, et. al., 00 Civ. 1179 (S.D.N.Y.)(LAK), based on the same conduct underlying the criminal charges. The Commission´s complaint charges that, from January 1998 through November 1999, the defendants raised at least $5,270,000 in a fraudulent, unregistered offering of Golden Lender stock. The complaint alleges that, acting at Bronstein and Yuzary´s direction, Sakh and Pak sold Golden Lender stock to retail customers -- including many elderly and infirm customers of modest means -- using a high pressure sales pitch that included numerous material misrepresentations and omissions. Among the misrepresentations and omissions allegedly used by the defendants to induce investors to part with their savings are the following:

  • False representations that Golden Lender would soon conduct an initial public offering and that investors would reap large profits once the firm went public;

  • Failure to inform investors of the risks associated with investing in Golden Lender, including Golden Lender>´s precarious financial condition; and

  • Concealment of exorbitant payments to Bronstein and Yuzary drawn from investor funds.

The complaint further alleges that the defendants recommended and sold Golden Lender stock to numerous investors for whom it was clearly unsuitable, including retirees who invested large portions of their modest retirement funds.

The Commission´s action, which alleges that the defendants violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) and 15(c) of the Securities Exchange Act of 1934 and Rules 10b-3, 10b-5, and 15c1-2 thereunder, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, is pending in the United States District Court, Southern District of New York. For further information about the Commission´s action, see Litigation Release 16441.