U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25756 / June 27, 2023
Securities and Exchange Commission v. Richard J. Rubin and Thomas J. Craft, Jr., No. 20-civ-10084 (S.D.N.Y. filed December 2, 2020)
SEC Settles Case Against Two Former Lawyers For Scheme to Create False Opinion Letters
On June 26, 2023, the U.S. District Court for the Southern District of New York entered final judgments against Richard J. Rubin and Thomas J. Craft, Jr., two former attorneys, in a civil action in which the SEC charged them for their role in a fraudulent legal opinion letter scheme to facilitate the sale of millions of shares of microcap securities to retail investors. The final judgments resolve the SEC’s case against Rubin and Craft.
The SEC’s complaint alleged that from December 2015 to July 2018, Rubin, who was disbarred in 1995, continued to fraudulently practice securities law by submitting at least 128 attorney opinion letters that allowed microcap stock issuers’ securities to be purchased by and sold to the investing public. The complaint alleged that Rubin signed certain letters, falsely claiming to be an attorney, and that he drafted other letters for Craft’s signature. The complaint alleged that Craft signed or permitted the use of his name and signature on at least 30 letters that falsely stated he had performed substantive work to formulate the opinions in those letters. The SEC’s complaint charged Rubin and Craft with violating 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.
Rubin and Craft were charged criminally by the United States Attorney’s Office for the Southern District of New York, and each pleaded guilty to one count of securities fraud. Rubin was sentenced on November 2, 2021, and received one-year probation, forfeited $117,068.15, and was ordered to pay a $1,000 monetary penalty and perform 200 hours of community service. Craft was sentenced on October 27, 2022 to four months of home confinement and one-year probation, forfeited $55,000, and was ordered to perform 200 hours community service. He also agreed to the surrender of his law license.
Rubin and Craft consented to the entry of separate final judgments in the SEC action, permanently enjoining each of them from violating the Securities Act and Exchange Act antifraud provisions and ordering penny stock bars.
The SEC’s litigation and investigation teams included Hane L. Kim and Michael Paley, and the litigation was supervised by Sheldon Pollock of the New York Regional Office. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York and the Office of the Inspector General of the SEC.