SEC Obtains Final Judgement Against Menachem Eitan and Zev Saltsman

Litigation Release No. 24534 / July 17, 2019

SEC v. Zev Saltsman, et al., Civil Action No. 07-CV- 4370 (NGG) (E.D.N.Y.)

On June 5, 2019, the Securities and Exchange Commission obtained final judgments against Israeli residents Menachem Eitan and Zev Saltsman.

The SEC's complaint, filed on October 19, 2007 and amended on March 23, 2015, alleged that Eitan and Saltsman controlled an Israeli investor group that participated in a fraudulent scheme to purchase controlling blocks of stock in two publicly traded companies - Xybernaut Corp. and Ramp Corp. - while misleading the investing public as to the true ownership of the companies' shares. To facilitate the scheme, Eitan and Saltsman allegedly paid kickbacks to the companies' officers and directors in exchange for access to future transactions with favorable terms. Saltsman and Eitan also allegedly sold unregistered shares of the two companies and failed to file ownership reports.

Eitan and Saltman consented to the final judgments, entered by the United States District Court for the Eastern District of New York, permanently enjoining them from violating the antifraud provisions of 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, the registration provisions of Sections 5(a), 5(b)(2), and 5(c) of the Securities Act, and the reporting and beneficial ownership disclosure provisions of Sections 13(d) and 16(a) of the Exchange Act and Rules 13d-1, 13d-2 and 16a-3 thereunder. The final judgment against Eitan orders him to pay $500,000 in disgorgement. The final judgment against Saltsman orders him to pay $5 million in disgorgement, which shall be deemed satisfied by the criminal restitution paid by Saltsman in a parallel criminal action.

The Commission's action continues against the remaining defendant, Andrew Brown.