UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 43995 / February 22, 2001
Investment Advisors Act of 1940
Release No. 1927 / February 22, 2001
File No. 3-10426
SEC INSTITUTES ADMINISTRATIVE PROCEEDING, IN THE MATTER OF TODD J. LASCOLA
The Securities and Exchange Commission ("Commission") instituted an administrative proceeding against Todd J. LaScola, a resident of Fort Lauderdale, Florida, based on the entry of an injunction prohibiting him from violating the antifraud provisions of the federal securities laws. In the Order, the Division of Enforcement ("Division") alleges that, on June 23, 2000, LaScola was enjoined by the District Court for the District of Rhode Island from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. In the Complaint, filed on December 29, 1998 in the injunctive proceeding, the Division alleged that LaScola, CPI Investment Management, Inc., a registered investment adviser, and CPA Investment Advisors, Inc., a registered broker-dealer, violated the antifraud provisions of the Exchange Act and the Advisers Act by effecting unauthorized transactions in client and customer accounts and by misappropriating client and customer funds. Specifically, the Division alleged that in November 1998, LaScola improperly invested approximately $6 million of a pension fund account owned by the International Brotherhood of Electrical Workers ("IBEW") in speculative and illiquid promissory notes. The Division further alleged that when the IBEW demanded reimbursement for the promissory note investments, LaScola improperly directed funds from various client and customer securities accounts to the IBEW's account without the clients' and customers' knowledge or consent. The Division also alleged that LaScola altered a customer's check and misappropriated $200,000 of the customer's funds. The civil action was captioned SEC v. Todd J. LaScola, et al., CA No. 98-610T. On November 16, 2000, LaScola was also indicted on allegations that included the allegations in the complaint.
A hearing before an administrative law judge will be scheduled to determine whether the allegations in the Order are true and to determine what remedial action, if any, is appropriate in the public interest.