Daniel T. Todt et. al.

SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 16467 / March 9, 2000

Securities and Exchange Commission v. Daniel T. Todt, et al., 98 Civ. 3980 (JGK) (SDNY)

Court Grants Summary Judgment Against Two Attorneys
in Action Involving Forged and Fictitious Securities

On February 24, 2000, the Honorable John G. Koeltl of the U.S. District Court for the Southern District of New York granted the Commission's motion for summary judgment against Daniel T. Todt and Rebecca L. Todt in an action involving the offer and attempt to sell forged and fictitious securities. The Court entered final judgments against Daniel and Rebecca Todt on February 28, 2000, enjoining them from their violative conduct and ordering them to pay civil penalties of $200,000 and $100,000, respectively. On March 7, 2000, the Court denied a motion by the Todts to alter or amend the final judgments.

The Court found in its February 24 Opinion and Order that the Todts, husband and wife attorneys, attempted to obtain money on four occasions by using a fraudulent bank certificate purportedly issued by the "Mitsubishi B.J. Bank," with a face value equivalent to nearly six billion dollars. The Court found that these attempts to obtain money using the Mitsubishi certificate violated the antifraud provisions of both the Securities Act of 1933 and the Securities Exchange Act of 1934 despite the fact that the attempts were unsuccessful.

The Court found that the Todts made repeated attempts to obtain funds using the Mitsubishi certificate even though they both knew it was a forgery, and "persisted in their efforts to dispose of the Certificate for value even after entry of a preliminary injunction against them." The Court found "ample evidence of motive and opportunity to defraud" and "a strong basis for concluding that the Todts, unless enjoined from doing so, will again violate federal securities laws."

The final judgments permanently enjoin Daniel and Rebecca Todt from violating the antifraud provisions of the federal securities laws, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and Section 17(a) of the Securities Act. The final judgments also impose the civil penalties noted above.

The Todts were the only remaining defendants in this matter. Six defendants previously consented to injunctive relief and, in two instances, civil penalties. One defendant had a default judgment entered against him. For additional information, see Litigation Release numbers 15771 (June 5, 1998), 15775 (June 9, 1998), 15797 (July 1, 1998), 15960 (October 28, 1998), and 16184 (June 10, 1999).