SEC Charges New York Attorney with Multi-Million Dollar Offering Fraud
Litigation Release No. 25139 / July 13, 2021
Securities and Exchange Commission v. Shimon Rosenfeld, No. 21-civ-3902 (E.D.N.Y. filed July 12, 2021)
The Securities and Exchange Commission charged Shimon Rosenfeld, Esq., an attorney and resident of Brooklyn, New York, with defrauding retail investors out of approximately $6 million in an illegal offering fraud scheme.
According to the SEC's complaint, between May 2014 and March 2018, Rosenfeld solicited at least five investors by promising them that he would pool their funds to purchase and then resell real estate for a profit, which he would then split with the investors. The investors, all friends of Rosenfeld, provided Rosenfeld with approximately $7 million for the proposed real estate transactions. The complaint alleges that, contrary to what Rosenfeld told investors, he never used investor funds to purchase any real estate. Instead, Rosenfeld allegedly misappropriated the investor funds and used them to trade securities in his own personal brokerage account. According to the complaint, while Rosenfeld returned approximately $1 million to investors, his undisclosed and unsuccessful securities trading resulted in the loss of the remaining $6 million of investor funds.
The SEC's complaint, filed in the Eastern District of New York, charges Rosenfeld with 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 SEC seeks injunctive relief, disgorgement with prejudgment interest, and a civil penalty.
The U.S. Attorney's Office for the Eastern District of New York previously filed a criminal complaint against Rosenfeld.
The SEC's investigation was conducted by Gerald Gross, Paul Gizzi, and Sheldon Mui of the SEC's New York Regional Office. The litigation will be led by Mr. Gizzi and Mr. Mui, and the case is being supervised by Sanjay Wadhwa. The SEC appreciates the assistance of the U.S. Attorney's Office for the Eastern District of New York.