Litigation Release No. 21038 / May 14, 2009

SEC v. Sherbourne Capital Management, Ltd., Sherbourne Financial, Ltd., Paul G. Bultmeyer, and Arthur J. Piacentini, Civil Action No. 09- 2302 (D-NJ)

On May 14, 2009, the Securities and Exchange Commission filed an emergency civil injunctive action in the United States District Court for the District of New Jersey charging two investment firms and their two owner-managers with securities fraud. The Commission alleged that Paul G. Bultmeyer, Arthur J. Piacentini, Sherbourne Capital Management, Ltd. and Sherbourne Financial, Ltd. orchestrated an offering fraud in connection with the sale of "Prime Certificates of Participation." The Honorable Jose L. Linares, United States District Judge of the District of New Jersey, granted the Commission's application for emergency relief and, among other things, froze the assets of the defendants and appointed a receiver over Sherbourne Capital, Sherbourne Financial, and Relief Defendant Ameripay, LLC.

According to the Commission's Complaint, the fraudulent scheme was orchestrated by Paul G. Bultmeyer, 68, of Upper Saddle River, NJ, and Arthur J. Piacentini, 48, of Saddle Brook, NJ. The Commission alleged that at least since 2004, Bultmeyer and Piacentini have operated the investment firms Sherbourne Capital Management, Ltd. and Sherbourne Financial, Ltd. Bultmeyer and Piacentini also operate Ameripay, LLC, a payroll services company based in Rochelle Park, NJ, that has numerous New Jersey municipalities and small businesses as clients. Bultmeyer is also Chief Executive Officer of Equitair, Ltd., a charter aviation company. The Complaint alleges that Sherbourne Financial, on its website, offered investors "Prime Certificates of Participation" and claimed that Sherbourne would use the proceeds to invest in private placement debt, high-grade corporate bonds, preferred stock, and government securities. Sherbourne claimed that its investments were safe and in some cases insured. The complaint also alleges that Sherbourne, however, did not invest in any such securities. Rather, Sherbourne transferred a net of over $900,000 to Ameripay, Bultmeyer, Piacentini, and Equitair.

The SEC's complaint charges each of the defendants 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 complaint also names Ameripay and Equitair as relief defendants only. The SEC's complaint seeks injunctions against future violations of the securities laws, disgorgement of ill-gotten gains, and civil money penalties against the defendants, in addition to the expedited relief the Court granted.

SEC Complaint