U.S. Securities and Exchange Commission
Litigation Release No. 17730 / September 17, 2002
SEC v. Isaac Sofair and Landway Estates, Inc., Civil Action No.02-7444 (GEL)(S.D.N.Y)
SEC CHARGES REGISTERED INVESTMENT ADVISER AND HIS FIRM WITH FRAUD
The Securities and Exchange Commission ("the Commission") announced today that it filed a civil fraud suit in the United States District Court for the Southern District of New York against Isaac Sofair of Bethesda, Maryland, and Landway Estates, Inc., a Delaware corporation owned and controlled by Sofair.
The Commission's complaint alleges that:
As part of the alleged fraudulent scheme, Sofair prepared and distributed to existing and potential clients false and misleading report brochures. More specifically, the report brochures contained false performance returns; gross overstatements of assets under management; fictitious securities holdings; misrepresentations about Sofair's educational background; a description of a fictitious professional staff; and fictitious audit opinions.
The complaint also alleges that Sofair repeatedly filed false investment adviser registration forms with the Commission. Among the alleged misrepresentations contained in the Commission filings were gross overstatements of assets under management; falsification of Sofair's education background; and Sofair's failure to disclose his prior felony conviction.
Sofair and Landway are charged with 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. The complaint also charges Sofair with violating Sections 204, 206(1), 206(2), 206(4), and 207 of the Investment Advisers Act of 1940, 15 U.S.C. §§ 80b-4, 80b-6(1), 80b-6(2), 80b-6(4), and 80b-7, as well as Rules 204-2(a)(1), (2), (6), (7) and (8); 204-2(b); 206(4)-1(a)(5); and 206(4)-2(a), 17 C.F.R. §§ 275.204-2(a)(1), (2), (6), (7), and (8); 275.204-2(b); 275.206(4)-1(a)(5); and 275.206(4)-2(a), thereunder.
In addition to seeking an injunction that permanently restrains and enjoins Sofair and Landway from violating the federal securities laws, the Commission seeks to obtain disgorgement, civil penalties and an expedited accounting from the defendants.