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U.S. Securities and Exchange Commission

Before the

Release No. 50297 / August 31, 2004

Admin. Proc. File No. 3-11623

In the Matter of Edward Landenbaum

The Securities and Exchange Commission ("Commission") announced today that it issued an Order Instituting Public Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Order") against Edward Landenbaum ("Landenbaum"), a former registered representative of American Bond Group, Inc., Westfield Financial Corp., Allied Capital, Inc., Cortlandt Capital Corp., Paragon Capital Corp., and Lloyd Wade Securities, Inc. and a resident of Brooklyn, New York. In the Order, the Division of Enforcement alleges that: (1) on August 16, 2000, the Commission filed a civil injunctive action against Landenbaum and others alleging that from October 1997 to April 2000, Landenbaum and others conducted a fraudulent private placement offering of stock purportedly issued by Precious Stones Trading Worldwide, Inc. ("Precious Stones"). The fraudulent offering raised at least $5.5 million from at least 208 investors. The Commission's complaint charges Landenbaum with violations of Sections 5 and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder; (2) on August 16, 2000, the United States Attorney's Office for the Southern District of New York filed a two count indictment against Landenbaum and others, charging conspiracy to commit fraud in the offer and sale of securities, mail fraud and wire fraud, and securities fraud in the offer and sale of Precious Stones securities. On September 17, 2002, Landenbaum pleaded guilty to both counts of the indictment. The felony counts of the indictment to which Landenbaum pled guilty alleged, among other things, that Landenbaum and his co-conspirators sold Precious Stones securities by soliciting customers to invest in Precious Stones by misrepresenting the company's business and the risks of investing; and (3) on November 25, 2003, Landenbaum was sentenced to 24 months incarceration, followed by 24 months probation, and ordered to pay $2 million in restitution jointly with another defendant.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Landenbaum an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions against Landenbaum are appropriate and in the public interest pursuant to Section 15(b) of the Exchange Act.

The Commission directed that an Administrative Law Judge shall issue an initial decision in this matter within 210 days from the date of service of the Order.

See also the Order in this matter


Modified: 09/01/2004