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U.S. Securities and Exchange Commission


Litigation Release No. 19974 / January 19, 2007

SEC v. Jack Calvin, et al., 03-CV-10586-MEL (D. Mass.)

Final Judgment Entered Against Defendant Byron Nernoff in "Prime Bank" Fraud Matter

The Securities and Exchange Commission announced today that, on January 16, 2007, the federal district court in Massachusetts entered a Final Judgment by consent against Byron Nernoff of Roslyn Heights, New York in a securities fraud case filed during 2003. The Final Judgment permanently enjoins Nernoff from violating Sections 17(a), 5(a) and 5(c) of the Securities Act of 1933 and Sections 15(a) and 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, the Final Judgment finds Nernoff liable for disgorgement of $232,342 and prejudgment interest of $74,206, but waives all but $20,000 of the disgorgement and prejudgment interest and does not impose a civil penalty based upon Nernoff's financial condition. Nernoff consented, without admitting or denying the allegations, to the entry of the Final Judgment.

On March 31, 2003, the Commission filed a Complaint against five defendants, including Nernoff, and one relief defendant. The Commission's Complaint alleged that Nernoff and the other defendants offered and sold securities in a purported trading program called Growth Benefit Systems (GBS) that was completely fictitious. The defendants allegedly solicited investors by, among other things, telling them that their funds would be pooled to purchase "Prime Bank" instruments that would be traded by top-rated banks and promising returns as high as 20% per month. In fact, according to the Complaint, the GBS trading program never existed and defendants' representations to investors were therefore false.

Previously, the Commission received default judgments against one defendant on December 3, 2003 and against two other defendants on September 9, 2003. On November 9, 2004, the Court granted the Commission's Summary Judgment motion against the relief defendant. The Commission is continuing to litigate this action against Defendant James Proffitt.

For further information, please see Litigation Release Nos. 18056 (March 31, 2003) and 18544 (January 15, 2004).



Modified: 01/19/2007