SECURITIES AND EXCHANGE COMMISSION
Securities Act of 1933
Release No. 8420 / May 14, 2004
Securities Exchange Act of 1934
Release No. 49701 / May 14, 2004
Administrative Proceeding Rel. No. 3-11487
THE COMMISSION INSTITUTES ADMINISTRATIVE PROCEEDINGS AGAINST FOUR BOILER-ROOM BROKERS CHARGED WITH FRAUD
The Securities and Exchange Commission today instituted public administrative and cease-and-desist proceedings against respondents Steven Ingrassia (Ingrassia) and Slava Volman (Volman). Both respondents were brokers associated with the Garden City, New York branch office of Donald & Co. Securities, Inc. (Donald & Co.), a brokerage firm that is now defunct. According to the order instituting the administrative proceedings, the Commission's Division of Enforcement alleges that from 1999 through 2002, the respondents engaged in fraudulent and manipulative practices involving two penny stocks, The Classica Group, Inc. (Classica) and eLEC Communications Corporation (eLEC), while working at the Garden City office of Donald & Co.
More specifically, the Division of Enforcement alleges that:
During the relevant period, Ingrassia, Volman and others ran Donald & Co.'s Garden City office as a partnership and divided profits. Ingrassia and Volman also actively participated in the management of the office.
While at Donald & Co., Ingrassia, Volman and others directed and otherwise engaged in fraudulent schemes with respect to Classica and eLEC securities that involved, among other things, the following elements: (a) the dissemination of false and misleading information to customers about the issuers through boiler-room tactics and inflated price predictions that had no basis in fact; (b) refusal to execute customer sell orders unless the shares could be cross traded with another Garden City office customer; and (c) payment of undisclosed compensation, known there as the "rip," to other brokers for selling the stock.
The proceedings were instituted under Section 8A of the Securities Act of 1933 ("Securities Act") and Section 21C of the Securities Exchange Act of 1934 ("Exchange Act"). As a result of the acts described above, the Division alleges that Ingrassia and Volman willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
A hearing will be scheduled before an Administrative Law Judge to determine whether the allegations against the respondents are true, to provide them with an opportunity to respond to the allegations, and to determine what, if any, remedial sanctions are appropriate and in the public interest.
See also the Order in this matter