Litigation Release No. 23651 / September 22, 2016

Securities and Exchange Commission v. James R. Trolice, et al., Civil Action No. 16-CV-02513 (D.N.J. filed May 4, 2016)

SEC Obtains Judgment Against Lee P. Vaccaro

On September 16, 2016, the Honorable William J. Martini of the United States District Court for the District of New Jersey entered a judgment against defendant Lee P. Vaccaro that imposed permanent injunctions and an officer and director bar.

The SEC's complaint, filed on May 4, 2016, alleged that Vaccaro and James R. Trolice pocketed the approximately $6 million they raised from more than 100 investors for limited liability companies they owned and controlled that purportedly held warrants to purchase the common stock of a technology startup company. Vaccaro and Trolice created a false sense of urgency and exclusivity around the offering, claiming that only a limited amount of warrants were available and that they eventually could be exercised at a very profitable price. The complaint alleged that Vaccaro spent at least a quarter-million dollars in investor funds at Las Vegas casinos.

In addition to Vaccaro's role in the offering fraud scheme, the SEC alleged that Vaccaro raised approximately $675,000 from several individuals that entrusted him to invest in securities on their behalf. Vaccaro defrauded these individuals by misrepresenting the investments he would make on their behalf and by misappropriating their funds.

The judgment permanently enjoins Vaccaro from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. In addition, the judgment bars Vaccaro from serving as an officer or director of a public company. Vaccaro consented to the entry of the judgment. The district court will determine monetary sanctions.

For further information, see Litigation Release Nos. 23532 (May 5, 2016) and 23562 (June 9, 2016).