U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

Securities and Exchange Commission

Litigation Release No. 18051 / March 25, 2003

SEC Seeks Civil Contempt Sanctions and Emergency Relief Against Philip R. Gratz, a New Jersey Resident and Former Stockbroker, for Violating a Federal Permanent Injunction

Securities and Exchange Commission v. Delta Rental Systems, Inc., Paul J. Carvajal, Carlos Prado, and Philip R. Gratz, Case No. 91-2136-CIV-MARRA (S.D. Fla.)

The Securities and Exchange Commission ("SEC" or "Commission") announced that on March 20, 2003, it filed with the United States District Court for the Southern District of Florida an emergency Application for an Order to Show Cause Why Defendant Philip R. Gratz ("Gratz") d/b/a Phoenix World Wide Enterprises, Inc. Should Not be Held in Civil Contempt for disobeying a prior final judgment of permanent injunction entered against him on April 30, 1992 in SEC v. Delta Rental Systems, et. al., Case No. 91-2136-CIV-MARRA (the "Delta Final Judgment.") The Delta Final Judgment enjoined Gratz from future violations of, among other things, the anti-fraud provisions of the federal securities laws.

In the application for an order to show cause, the SEC alleged that since November 1998 through the present, Gratz has been ignoring the Delta Final Judgment by fraudulently offering and selling securities to the public, raising more than $8.9 million from 11 investors, in violation of Sections 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, thereunder. The Commission's application alleged that Gratz misrepresented to investors that their funds would be used to trade in the stock market and that he falsely guaranteed investors annual returns of 25% and higher. The SEC's application also alleged that of the $8.9 million raised from investors, at least $3.02 million in investor monies was misappropriated to fund a lavish lifestyle for Gratz and his wife, Christine Gratz a/k/a Christine Seeger ("Christine Gratz"). Specifically, the SEC alleged that investor funds were used to purchase, among other things, a luxurious house, Mercedes Benz automobiles, furniture and home improvements, designer clothes, jewelry and artwork. In addition, the application alleged that Gratz failed to disclose his disciplinary history to investors, which includes the Delta Final Judgment, an SEC administrative bar, and a federal criminal conviction for securities and mail fraud.

On March 21, 2003, the Honorable Kenneth A. Marra entered, among other things, an Order to Show Cause Why Gratz Should Not be Held in Civil Contempt, an order temporarily freezing Gratz's assets, an order requiring Gratz to provide an accounting, an order to preserve evidence, an order expediting discovery and an order appointing a receiver. In addition, the Court entered, among other things, an order temporarily freezing the assets of Non-Parties Christine Gratz and Eric J. Gratz ("Eric Gratz"). The Court has scheduled a hearing for March 31, 2003 to decide the SEC's request for an order holding Gratz in civil contempt and for relief sought against Christine Gratz and Eric Gratz.

 

http://www.sec.gov/litigation/litreleases/lr18051.htm

Modified: 03/25/2003