U.S. Securities and Exchange Commission
Litigation Release No. 18736 / June 3, 2004
Commission Obtains Injunction and Penny Stock Bar Against Final Defendant In Broker Bribery Fraud Case, and Institutes Related Administrative Proceedings Against Twelve Others
Securities and Exchange Commission v. Leonard Alexander Ruge, et al., 97 Civ. 9306 (DAB) (SDNY)
The United States Securities and Exchange Commission (Commission) announced today that on May 12, 2004, the United States District Court for the Southern District of New York enjoined Richard Balber from further violations of the federal securities laws and barred Balber from participating in any offering of a penny stock in the civil action entitled SEC v. Leonard Alexander Ruge, et al., 97 Civ. 9306 (DAB) (SEC v. Ruge). Balber is the last of thirteen defendants to be enjoined in this civil action. The court had previously enjoined Mac Beagelman, Stephen Evers, Daniel Kolchkov, Jeff Sanders, Mark Zaborsky, Alex Grinshpon, Alex Solon and Jeffery Stone on June 26, 2003; Richard Wolff on July 2, 2003; and Leonard Alexander Ruge, Michael Scott Symons and Eugene Flaksman on October 28, 2003. In connection with those previously entered injunctions, the court also barred defendants Ruge, Symons, Flaksman, Kolchkov, Wolff, Grinshpon, Solon and Stone from participating in any offering of a penny stock. Ruge, Beagelman, Symons, Balber, Evers, Flaksman, Kolchkov, Sanders and Zaborsky consented to the entry of the relief against them in the civil action without admitting or denying the allegations in the Commission's complaint. Injunctions and penny stock bars were entered against Wolf, Grinshpon, Solon and Stone by default. The Commission had previously dismissed its complaint against a fourteenth defendant, Mark Furman, who died after the complaint was filed. The entry of the injunction and penny stock bar against Balber concludes the civil action.
The Commission's complaint in SEC v. Ruge alleges that, from June 1995 through February 1996, the defendants engaged in a fraudulent scheme to manipulate the public trading market for the securities of International Investment Group Ltd. (IIGR) through the payment of bribes to various registered representatives and other individuals who sold IIGR stock to retail investors without disclosing the receipt of the bribes. The Commission's complaint charges all of the defendants with violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. All of the defendants except for Balber and Evers were also convicted in parallel criminal actions based on the same conduct underlying the Commission's complaint.
In related administrative proceedings instituted on June 2, 2004, Ruge, Symons, Evers, Flaksman, Kolchkov, Sanders and Zaborsky consented to be barred from associating with any broker or dealer, and Beagelman, Evers, Sanders and Zaborsky consented to be barred from participating in any offering of a penny stock. The Commission also announced the issuance of an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 against Wolff, Grinshpon, Solon and Stone on June 2, 2004. Those proceedings are pending.
For additional information, see Lit. Rel. No. 15595 (December 18, 1997)