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U.S. Securities and Exchange Commission

U.S. Securities and Exchange Commission

Litigation Release No. 22242 / January 30, 2012

SEC V. MARCIN MALARZ ET AL., Case No. 11-cv-8803 (N.D. Ill., filed December 12, 2011)

Judgments Entered Against Arthur and Gloria Lin

The Securities and Exchange Commission announced today that on January 25, 2012 U.S. District Judge Ruben Castillo entered judgments against Arthur Lin (“Lin”) and his wife, Relief Defendant Gloria Lin. The SEC’s complaint, filed in the U.S. District Court for the Northern District of Illinois, alleges that from at least September 2006 through at least January 2009, Defendants Marcin Malarz (“Malarz”), Jacek Sienkiewicz (“Sienkiewicz”), and Lin raised at least $14,380,000 from at least 43 investors through the fraudulent unregistered offer and sale of promissory notes issued by entities owned and controlled by Malarz and/or Sienkiewicz. Malarz Equity Investments, LLC (“Malarz Equity”) was the primary entity through which the scheme was perpetrated. Gloria Lin was a member of Malarz Equity, and Lin was an officer of Malarz Equity. The complaint alleges, among other things, that investors were told that their funds would be used to purchase apartment complexes and rehabilitate and convert the individual apartment units for sale as condominiums. The complaint alleges that contrary to these representations, Malarz used substantial sums of the Malarz Equity investors’ funds for his personal benefit and to make ponzi-type “interest” and principal payments to previous investors. Further, Lin received at least $436,000 in undisclosed commission payments, which were transmitted to Relief Defendant Gloria Lin.

To resolve the Commission’s charges, without admitting or denying the allegations of the complaint, Lin consented to the entry of a judgment permanently enjoining him from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and ordering disgorgement of $436,000 and prejudgment interest of $49,583, but waiving payment of all but $158,240 in disgorgement and prejudgment interest and not imposing a civil penalty, based upon Lin’s representations in his sworn statement of financial condition dated August 16, 2011. Without admitting or denying the allegations of the complaint, Gloria Lin consented to the entry of a judgment ordering her jointly and severally liable for the disgorgement amount owed by Lin. The Lins are required to pay $43,500 within 14 days of the entry of the final judgments and the remaining $114,740 within 1 year of the date of entry of the final judgments plus post-judgment interest thereon.

The Commission acknowledges the assistance of the Illinois Securities Department in this matter.



Modified: 01/30/2012