Securities and Exchange Commission
Litigation Release No. 18076 / April 8, 2003
Accounting and Auditing Enforcement
Release No. 1755 / April 8, 2003
SEC Charges Benjamin Rogatinsky, Former CEO of PrintontheNet.com, With Accounting Fraud
SEC also Names Rogatinsky's Father as a Relief Defendant
and Freezes Assets To Recover Misappropriated Funds
Securities and Exchange Commission v. Benjamin Rogatinsky and Reuven Rogatinsky, , Case No. 03-60648 (S.D. Fla., filed April 3, 2003)
On April 3, 2003, the Securities and Exchange Commission ("Commission") filed a complaint alleging securities fraud against Hollywood, Florida resident Benjamin Rogatinsky, the former CEO of PrintontheNet.com ("PrintontheNet"). The Complaint charges Rogatinsky with orchestrating a fraudulent offering of PrintontheNet securities and engaging in various improper accounting practices. The complaint also names Rogatinsky's father, Reuven Rogatinsky of Hollywood, Florida, as a relief defendant for allegedly receiving at least $115,000 in proceeds from PrintontheNet's securities offering into his foreign bank accounts. On April 4, 2003, the Commission obtained an emergency order from the District Court temporarily freezing the assets of Rogatinsky and his father.
The Commission's complaint alleges that in early 2000, PrintontheNet raised approximately $3 million from investors in a private placement of stock. The Complaint alleges that Rogatinsky violated the federal securities laws in connection with the securities offering by: 1) failing to disclose that PrintontheNet was a guarantor on approximately $7.3 million in loans received by related parties; 2) failing to disclose that the largest loan underlying these guarantees (in the amount of approximately $7 million) was in default; and 3) causing PrintontheNet to file financial reports with the Commission that misstated the financial performance of PrintontheNet and one of its subsidiaries, PrintAmerica Interactive, Inc. ("PrintAmerica"). In particular, the Complaint alleges that Rogatinsky falsified PrintAmerica's books and records to conceal approximately $582,000 in loans owed by PrintAmerica. These false entries resulted in PrintAmerica's financial statements for the nine-month period ended September 30, 1999 reflecting a net income of $96,371 when in fact, PrintAmerica suffered a net loss of approximately $430,000 during the same period.
The complaint also alleges that after receiving the $3 million in proceeds from the stock offering, Rogatinsky illegally transferred at least $115,000 of those funds to bank accounts controlled by his father in Israel and the Cayman Islands.
The Commission's complaint seeks a permanent injunction against Rogatinsky based on his violations of the antifraud and issuer reporting and books and records provisions of the federal securities laws (Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), 13(b)(2) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-11, 13b2-1 and 13b2-2 thereunder). The complaint also seeks an order barring Rogatinsky from serving as an officer and director of a public company, accountings and disgorgement from Rogatinsky and his father of their ill-gotten gains, an order that they repatriate assets located outside the United States, and civil penalties from Rogatinsky.
The Commission wishes to thank the Israel Securities Authority for its assistance in this matter.
SEC Complaint in this matter