U.S. SECURITIES & EXCHANGE COMMISSION
Litigation Release No. 18094 / April 18, 2003
SEC FILES CHARGES AGAINST PHILIP R. GRATZ FOR VIOLATING AN ADMINISTRATIVE BAR AND FOR ACTING AS AN UNREGISTERED BROKER DEALER
Securities and Exchange Commission v. Philip R. Gratz, Case No. 03-20889-CIV-SEITZ/BANDSTRA (S.D. Fla., April 15, 2003).
The Securities and Exchange Commission ("SEC") announced that on April 15, 2003, it filed a complaint with the United States District Court for the Southern District of Florida against Philip R. Gratz ("Gratz"), a New Jersey resident and former stock broker, charging with him violating an SEC administrative bar previously imposed against him by consent and for violating the broker-dealer registration provisions of the federal securities laws. According to the SEC's complaint, from at least November 1998 until March 20, 2003, Gratz, doing business as Phoenix World Wide Enterprises, Inc. raised more than $8.9 million from investors by, among other things, falsely promising that he would invest their funds in the stock market. The SEC's complaint alleges that, contrary to Gratz's promises, $3.02 million in investor funds were misappropriated for his personal use.
The complaint also alleges that in connection with his fraudulent misconduct, Gratz received transaction related compensation for providing investment advice and for inducing the purchase or sales of securities while not registered with the SEC as a broker or dealer. Accordingly, the SEC's complaint provides that Gratz violated a 1992 SEC Order prohibiting him from association with any broker, dealer or investment adviser as well as the broker-dealer registration provisions.
The SEC's complaint seeks to restrain and permanently enjoin Gratz from violating Sections 15(a)(1) and 15(b)(6)(B) of the Securities Exchange Act of 1934, Section 203(f) of the Investment Advisers Act of 1940, and the 1992 SEC Order. The complaint also requests, among other things, that Gratz be ordered to pay civil penalties for his violations of the federal securities laws.
On March 20, 2003, as a result of the alleged fraudulent conduct described above, the SEC filed an emergency civil contempt action against Gratz for disobeying a prior final judgment of permanent injunction entered against him in SEC v. Delta Rental Systems, et. al., Case No. 91-2136-CIV-MARRA (S.D. Fla.). See Litigation Release No. 18051, March 25, 2003.