SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16442 / February 17, 2000
SECURITIES AND EXCHANGE COMMISSION v. WILLIAM GOREN, NEW AGE FINANCIAL SERVICES, INC., and NEW TIMES SECURITIES SERVICES, INC., U.S. District Court, E.D.N.Y., No. CV 00 970
The Securities and Exchange Commission today charged William Goren, a Long Island financial adviser, and two firms he controlled with a $35 million Ponzi scheme conducted over more than 10 years. Named in the Commission's Complaint filed in the U.S. District Court for the Eastern District of New York are:
The Complaint alleges as follows:
Goren defrauded hundreds of investors, causing losses believed to exceed $35 million. Goren, often acting through New Age, sold promissory notes to investors and represented that the funds raised would be invested in various ways, including "venture capital." Goren generally promised a return of 12% to 25% on the notes, although he sometimes promised as much as 30%. Goren also sold interests in a non-existent money market fund that he called the "New Age Securities Money Market Fund." Finally, Goren also told some investors that their money would be invested in genuine well-known mutual funds. In truth, Goren commingled all of the funds raised through these various means, and dissipated most of the money.
Goren misappropriated a substantial portion of the investor funds to support a lavish personal lifestyle. He used some of the money raised from later investors to pay purported interest or dividends to earlier investors, and to repay principal to earlier investors. Finally, Goren transferred some of the funds to New Times to meet the ongoing cash needs of the broker-dealer.
The Commission charged Goren and New Age with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The defendants are consenting to entry of a preliminary injunction against future violations of these provisions, an asset freeze and appointment of a receiver, all subject to order of the Court. The Commission also seeks permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, and civil monetary penalties against Goren and New Age; and recovery from New Times of proceeds of the fraud that were transferred to New Times.