SEC v. Murdoch Security & Investigations, Inc., et al.
Case No. 11-cv-07076-JGK (S.D.N.Y.)
On February 17, 2012, the SEC amended its complaint filed on October 7, 2011 against Murdoch Security & Investigations, Inc. (“MSI”) and its two principal officers, Robert Goldstein (“Goldstein”) and William Vassell (“Vassell”) (collectively, the “Defendants”). The amended complaint alleged that, from at least October 2010 through approximately August 2011, the Defendants violated the anti-fraud provisions of the federal securities laws when they raised more than $1 million, through the illegal sale of MSI unregistered offering and sale of securities from noteholders, who were promised 22% annual interest on their investments. The amended complaint further alleged that MSI, through Goldstein, misrepresented material facts to investors about the security company, including boasts of highly lucrative overseas operations when, in fact, MSI lacked any international business whatsoever. See Amended Complaint.
Goldstein and Vassell were ordered to pay a total of $857,500.00 in disgorgement, prejudgment interest, and penalties. The Clerk was ordered to hold the funds in an interest bearing account with the Court Registry Investment System (collectively, the “Fund”), pending further order of the Court. The Commission voluntarily dismissed its claims against MSI. See Goldstein’s Final Judgment, Vassell’s Final Judgment, and MSI’s Stipulation of Voluntary Dismissal.
As of January 9, 2017, a total of $750,000.00 in disgorgement has been paid into the Fund for distribution to harmed investors.
On July 17, 2014, the Court appointed Damasco & Associates LLP as the Tax Administrator to fulfill the tax obligations of the Fund.
On March 10, 2015, the Court established a Fair Fund for the $750,000.00 paid by Goldstein and for any future funds paid by Vassell, and appointed Kurtzman Carson Consultants LLC as the Distribution Agent to oversee the administration and distribution of the Fair Fund to harmed investors. See Order to Establish Fair Fund and Appoint a Distribution Agent.
On December 21, 2015, the Court approved the Distribution Plan. See Order Approving Proposed Distribution Plan.
The Distribution Plan provides that the distribution of the Fair Fund shall be made on a pro rata basis to the 92 Eligible Distribution Fund Recipients that were identified by the Distribution Agent, who were harmed by the Defendants’ misconduct and suffered a net loss. The detailed methodology for allocating the Fair Fund is described in paragraphs 12-16 of the Distribution Plan.
On August 11, 2016, the Commission filed a motion for an order directing the Clerk of Court to turn over the Fair Fund funds to the Distribution Agent for disbursement to Eligible Distribution Fund Recipients in accordance with the Distribution Plan. See the Commission’s Motion. On August 12, 2016, the Court entered an order granting the Commission’s Motion. See the Court’s Order.
On October 24, 2018, the Commission filed a motion for an order authorizing the Distribution Agent to distribute the residual Fair Fund to Eligible Investors. See the Commission’s Motion.
On November 19, 2018, the Court entered an order granting the Commission’s motion. See the Court’s Order.
For more information, please contact the Distribution Agent: