U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20335 / October 17, 2007
SEC v. Joshua S. Shainberg and Laryssa Shainberg, 07 Civ. 8814 (S.D.N.Y.)
SEC Brings Action to Set Aside Fraudulent Transfer of Assets by Securities Law Violator
On October 12, 2007, the U.S. Securities and Exchange Commission filed a civil action in the U.S. District Court for the Southern District of New York seeking to set aside the fraudulent transfer of a Manhattan cooperative apartment from Joshua S. Shainberg to Laryssa S. Shainberg.
In 1999, the Commission brought a civil enforcement action against Joshua S. Shainberg, alleging that he violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In 2006, after a jury trial, the court entered a judgment against Joshua S. Shainberg, permanently enjoining him from future violations of the federal securities laws, ordering him to pay disgorgement and prejudgment interest of $589,109.81, and imposing a civil penalty against him of $200,000. Joshua S. Shainberg has not paid any portion of that judgment.
The Commission's complaint in the fraudulent transfer action alleges that in two transactions in 2001 and 2003, while the Commission's civil enforcement action was pending against him, Joshua S. Shainberg transferred all his interest in a Manhattan cooperative apartment to Laryssa S. Shainberg, his wife, without receiving consideration. The complaint alleges that the transfer of the apartment was a fraudulent conveyance in that it was made while Joshua S. Shainberg was a defendant in the civil enforcement action, and that Joshua S. Shainberg made the transfer with the intent to hinder, delay, or defraud the Commission in its collection efforts.