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U.S. Securities and Exchange Commission



Litigation Release No. 21952 / May 2, 2011

Securities and Exchange Commission v. Radical Bunny, LLC, Tom Hirsch, Berta Walder, Howard Walder, and Harish Shah, United States District Court for the District of Arizona, Case No. 2:09-cv-01560-SRB (July 28, 2009).


The Securities and Exchange Commission announced today that it obtained summary judgment against four individuals who the Commission charged with securities fraud for orchestrating a mortgage lending scheme.

On April 12, 2011, the United States District Court for the District of Phoenix issued an Order granting the Commission’s motion for summary judgment against defendants Tom Hirsch, of Peoria, Ariz., Berta Walder and Howard Walder, of Peoria, Ariz., and Harish P. Shah, of Phoenix. The Order found that the defendants, through their company, Radical Bunny LLC, pooled investor funds to make loans to Mortgages Ltd. and made material misrepresentations and omissions to investors. The Order found that the defendants violated the securities registration, antifraud, and broker-dealer registration provisions of the federal securities laws. The final judgment, entered on April 28, 2011, permanently enjoins the defendants from violating the securities registration, antifraud, and broker-dealer registration provisions, and further orders the defendants to disgorge their ill-gotten gains (Hirsch was ordered to disgorge $1,245,220, the Walders $1,245,217, and Shah $740,160) plus prejudgment interest, and each defendant was ordered to pay civil penalties of $120,000.

The Commission’s complaint, which was filed on July 28, 2009, alleged that Radical Bunny and the defendants raised $197 million from investors nationwide and that they made a series of misrepresentations and omissions to investors about the safety and security of the investment and the applicability of the securities laws to their offering. In particular, the complaint alleged that the defendants falsely represented that Radical Bunny held a secured interest in real estate and/or Mortgages Ltd.’s assets even after their attorneys repeatedly advised them that documentation of that security interest was either non-existent or defective.

Previously, Radical Bunny, through its Chapter 11 bankruptcy trustee, consented to the entry of a judgment of permanent injunction entered by the Court on November 4, 2009, which permanently enjoined Radical Bunny from violating the securities registration and antifraud provisions.

The Commission acknowledges the substantial assistance of the Securities Division of the Arizona Corporation Commission in its investigation and the litigation.

For further information, see Litigation Release No. 21157 (July 28, 2009).



Modified: 05/03/2011