U.S. Securities and Exchange Commission
Litigation Release No. 18677 / April 23, 2004
SECURITIES AND EXCHANGE COMMISSION v. NATIONAL INVESTMENT ENTERPRISES AND MICHAEL GARIAN A/K/A MELKON GHARAKHANIAN A/K/A BIKA BALIAN, Civil Action No. (CV 03-0896 DSF (JWJx)) (C.D. Cal.)
COURT ORDERS DISGORGEMENT AND CIVIL PENALTIES IN $20 MILLION INVESTMENT FRAUD
The Commission announced today that on April 13, 2004, the Honorable Dale S. Fischer, United States District Judge for the Central District of California, ordered defendants Michael Garian and National Investment Enterprises, Inc. to repay $2,602,490 in ill-gotten gains they received from investors as a result of a fraudulent investment scheme Garian operated through NIE between 1997 and mid-2001. The Court further ordered Garian to pay a civil money penalty in the amount of $120,000 based on his fraudulent conduct. Previously, on February 12, 2004, the Court entered an order of permanent injunction against Garian and NIE, permanently enjoining both from committing further violations of the antifraud, investment adviser fraud, and securities and investment company registration provisions of the federal securities laws.
The Court's judgments against Garian and NIE were based upon the facts alleged in the Commission's complaint, filed on February 7, 2003. According to the complaint, between 1997 and mid-2001, Garian, 42, of Van Nuys, California, and Glendale-based NIE raised over $20 million from about 200 investors. Most of the investors Garian and NIE targeted were residents of Glendale's large Armenian-American community, many of whom had never invested in the stock market, and some of whom were Armenian immigrants for whom English was a second language. Garian falsely told investors that he would use their money to purchase various securities for their accounts; had an "inside line" to upcoming "hot" IPOs, particularly for Internet and other technology-related companies; and could deliver large profits quickly. Garian and NIE furthered their scheme by sending investors false monthly account statements that represented that NIE was purchasing large volumes of IPO shares and other securities on their behalf and making large profits from Garian's trading activities. (Litigation Release No. 17974).
[SEC v. National Investment Enterprises and Michael Garian a/k/a Melkon Gharakhanian a/k/a Bika Balian, Civil Action No. (CV 03-0896 DSF (JWJx)) (C.D. Cal)].