U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23325 / August 20, 2015
Securities and Exchange Commission v. Moshe Yehuda Dunoff, Civil Action No. No. 2:15-cv-04738-JD (E.D. Pa.)
SEC Charges Florida Man with Participating in International Boiler Room Fraud
The Securities and Exchange Commission today charged Moshe Yehuda Dunoff, of West Palm Beach, Florida, with participating in a "boiler room"-type offering fraud that raised over $1.5 million from 58 investors in 14 countries through the purported purchase and sale of discounted U.S. securities.
The Commission's complaint, filed in U.S. District Court for the Eastern District of Pennsylvania, alleges that, from at least January 2009 through December 2010, Dunoff played a central role in a scheme in which individuals located in Southeast Asia made unsolicited telephone calls to prospective investors, claiming that they worked for a Chicago-based broker-dealer named Gruber and Green, Inc. and proposing a no-lose investment strategy. Prospective investors were told that they could buy common stock in publicly traded companies at substantial discounts, and that Gruber and Green could arrange for the future sale of such securities to "institutional investors" at a premium.
The complaint further alleges that, in reality, Gruber and Green did not exist, the proposed investment strategy was a sham, and the statements made to investors were lies. Investors not only failed to receive the profits that they were promised, but also lost their entire investments.
The Commission's complaint alleges that investor funds were not used to purchase common stock as promised, but instead were deposited into six accounts opened by Dunoff at three different banks in Pennsylvania and Florida in the names of two fictitious companies. Dunoff kept a portion of the proceeds for his own benefit, and transferred the remaining funds to bank accounts in the Philippines, Thailand, and Indonesia controlled by others involved in the scheme.
The complaint charges Dunoff with violations of Sections 17(a)(1) and (3) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rules 10b-5(a) and (c) thereunder, and seeks a permanent injunction, disgorgement plus prejudgment interest and a penalty. Dunoff has agreed to a bifurcated settlement that provides he will be permanently enjoined and reserving the issues of disgorgement, prejudgment interest and a civil penalty for further determination by the Court upon motion of the Commission.
The SEC's investigation was conducted by Lisa M. Candera, Daniel L. Koster and Brendan P. McGlynn, and supervised by G. Jeffrey Boujoukos, in the Philadelphia Regional Office. The litigation will be led by David L. Axelrod and Christopher R. Kelly.