UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16378 / December 2, 1999
SECURITIES AND EXCHANGE COMMISSION v. ROBERT J. STRAUSS, United States District Court for the Northern District of Georgia, Civil Action No. 1 99-CV-2965 (N.D. Ga)
The Commission announced that on November 24, 1999, the Honorable Richard W. Story entered a final judgment of permanent injunction by consent enjoining Robert J. Strauss (Strauss), a former vice president and portfolio manager of State Mutual Insurance Company (State Mutual), of Rome, Georgia from future violations 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. In addition, Strauss was barred from serving as an officer or director of any publicly held company.
The Commission's complaint sets forth Strauss's scheme to defraud and efforts taken to conceal his activities from State Mutual. For example, from April 1995 through August 1997, the complaint alleges that Strauss fraudulently transferred over $16 million in funds and securities from State Mutual, of which Strauss misappropriated approximately $5.8 million. Strauss fraudulently transferred the funds and securities without State Mutual's authorization and in contravention of its investment policies. In addition, Strauss received kickbacks of approximately $3.2 million in money and/or stock for the unauthorized securities transactions and unauthorized transfers of money. Strauss concealed his conduct by, among other things, falsifying entries on State Mutual's books and records, falsifying reports to State of Georgia regulatory authorities, and by making false representations to State Mutual's internal and independent auditors. See Litigation Release No. 16360.