U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20931 / March 5, 2009
Securities and Exchange Commission v. Anthony Fareri, Fareri Financial Services, Inc. d/b/a Amerifinancial, and Anthony Fareri & Associates, Inc., Civil Action No. 09-80360-CIV (S.D. Fla., March 3, 2009)
SEC Charges Former Florida Stockbroker and Broker Dealer with Securities Fraud in $4.7 Million Market Manipulation and Kickback Case
On Tuesday, March 3, 2009, the Securities and Exchange Commission filed a complaint against former Florida stockbroker Anthony Fareri, 43, Fareri Financial Services, Inc. d/b/a Amerifinancial ("FFS"), and Relief Defendant Anthony Fareri & Associates, Inc. ("AFAI") for their involvement in a market manipulation and kickback scheme that defrauded customers of the Boca Raton brokerage firm.
The SEC complaint, filed in the United States District Court for the Southern District of Florida, alleges that in 2004 and 2005:
According to the complaint, the two shell companies were Secure Solutions Holdings, Inc. (SSLX) and American Financial Holdings, Inc. (AFHJ). Each traded on the over-the-counter market and was quoted on the Pink Sheets.
The Commission's complaint alleges that Fareri and FFS violated Section 17(a) of the Securities Act of 1933, Sections 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder and that FFS also violated Section 15(c)(1) of the Exchange Act. The complaint seeks permanent injunctions, disgorgement plus prejudgment interest and civil penalties. AFAI is not alleged to have engaged in any federal securities law violations, but is alleged to hold or control funds that represent fruits of violations committed by the defendants.
On September 24, 2007, Paul Harary consented to a final judgment that permanently enjoined him from violating the antifraud and securities registration provisions of the federal securities laws and directed him to pay approximately $4 million in disgorgement and prejudgment interest. See Securities and Exchange Commission v. Paul Harary, Civil Action No. 07-80875-CIV (S.D. Fla., Sept. 24, 2007). Harary also pleaded guilty to conspiracy to commit mail and wire fraud in parallel criminal actions brought in the United States District Court for the District of Columbia. See United States v. Harary, Crim. No. 07-Cr.-209 (EGS) (D.D.C.).
The Commission acknowledges the assistance of the U.S. Attorney's Office for the District of Columbia, the Federal Bureau of Investigation, the United States Postal Inspection Service, NASD (now known as the Financial Industry Regulatory Authority), and the British Columbia Securities Commission.
The Commission's investigation in this matter is ongoing.
The Commission has published guidance for investors concerning investments in microcap stocks. See: http://www.sec.gov/investor/pubs/microcapstock.htm.