Securities and Exchange Commission
Litigation Release No. 16292 / September 23, 1999
SECURITIES AND EXCHANGE COMMISSION V. BERNARD J. KRISPINSKY, Civil Action No. 99-1561 (W.D.Pa.)
The Securities and Exchange Commission ("Commission") announced that on September 23, 1999, it filed a civil injunctive action against Bernard J. Krispinsky ("Krispinsky") in the United States District Court for the Western District of Pennsylvania. The Commission's Complaint alleges that, between 1995 and 1997, Krispinsky, while acting as an investment adviser, engaged in a scheme to defraud approximately 100 investors who invested approximately $240,000 in seven investment clubs, by making misrepresentations and omissions of material fact. During the course of the scheme, Krispinsky, who made all investment decisions for the members of the investment clubs, incurred trading losses of at least 53% of the value of investors' funds. In an attempt to conceal the losses and induce additional investments, Krispinsky created and distributed false account statements and made false oral statements to investors wherein he overstated the value of club accounts by as much as 807% and listed as club holdings securities the clubs did not own. During this time period, Krispinsky was also associated with a registered broker-dealer in the Pittsburgh, Pennsylvania area.
Simultaneous with the filing of the Complaint, the Honorable Donetta W. Ambrose of the United States District Court for the Western District of Pennsylvania, entered an order of permanent injunction against Krispinsky, enjoining him from violations of the antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. The Court reserved the issue of the imposition of a civil penalty for further determination. Without admitting or denying the allegations in the Complaint, Krispinsky consented to the entry of the order of permanent injunction reserving the issue of civil penalty.