SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17027 \ June 6, 2001
SEC SUES OFFICERS OF SOUTH FLORIDA ISSUER AND SALES AGENTS FOR SECURITIES FRAUD
Securities and Exchange Commission v. William J. Tishman, Jeffrey M. Goldberg, Robert E. Duke and Sam Sara Investments, Inc., Civil Action No. 01-6952-CIV-DIMITROULEAS (S. D. Fla., Miami Division)(complaint filed June 5, 2001).
The Securities and Exchange Commission (SEC) announced today that it filed a complaint in the United States District Court for the Southern District of Florida against William J. Tishman, Jeffrey M. Goldberg, Robert E. Duke and Sam Sara Investments, Inc. (Sam Sara). In its complaint, the SEC alleges that Tishman and Goldberg, in connection with four private securities offerings, committed securities fraud by making false representations to investors about the use of their investment funds. The SEC also alleges that Tishman, Goldberg, Duke and Sam Sara illegally sold securities in unregistered transactions, and that Duke and Sam Sara acted as unregistered broker-dealers.
According to the SEC's complaint, Tishman, former CEO of Medical Research Industries, Inc. (MRI), a Ft. Lauderdale based company, was responsible for material misrepresentations in the offering materials MRI used to raise $52 million through sales of MRI stock between 1996 and mid-1999. The offering materials falsely represented that MRI would use the offering proceeds primarily for product development, marketing and equipment purchases, and that no commissions, or limited commissions, would be charged in connection with the MRI stock sales. According to the SEC's complaint, Tishman misappropriated approximately $18 million of MRI offering proceeds, using the funds to pay his personal expenses and gambling debts. Additionally, the SEC alleges that MRI paid commissions in excess of the amounts disclosed in the offering materials, and that Goldberg, MRI's executive vice president of sales, was aware of this discrepancy throughout the time he hired and supervised MRI's sales agents. MRI engaged Sam Sara, a South Florida boiler room headed by Duke, to complement MRI's own sales force in the sales of MRI stock.
The SEC alleges in its complaint that Tishman and Goldberg violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. The SEC also alleges that Goldberg, Duke and Sam Sara violated Section 15(a) of the Exchange Act, and that Duke and Sam Sara violated Sections 5(a) and 5(c) of the Securities Act. In its complaint, the SEC requests that the court permanently enjoin Tishman and Goldberg from violating the securities registration and antifraud provisions of the federal securities laws, impose a civil money penalty against them, and order them to account for, and disgorge, all monies derived from their fraud. Additionally, the SEC requests in its complaint that the court permanently enjoin Goldberg from violating the broker-dealer registration provisions of the federal securities laws, and bar Tishman from serving as an officer or director of a public company. The SEC further requests in its complaint that the court permanently enjoin Duke and Sam Sara from violating the securities registration and broker-dealer registration provisions of the federal securities laws, and impose a civil money penalty against them.http://www.sec.gov/litigation/litreleases/lr17027.htm