SECURITIES AND EXCHANGE COMMISSION<
Litigation Release No. 16504 / April 4, 2000
Securities and Exchange Commission v. Simon M. Rosenfeld, Terry D. Kochanowski, and John F. Yakimczyk, 97 CIV. 1467 (S.D.N.Y.) (WHP)
The Securities and Exchange Commission ("Commission") announced today that on March 30, 2000, the Honorable William H. Pauley III, United States District Judge for the Southern District of New York, entered a Final Judgment of Permanent Injunction and Other Equitable Relief By Consent Against John F. Yakimczyk ("Yakimczyk").
In the underlying action, which was filed on March 4, 1997, the Commission alleged that Yakimczyk and the other two defendants, Simon M. Rosenfeld ("Rosenfeld") and Terry D. Kochanowski ("Kochanowski"), participated in a "pump and dump" scheme to inflate the value of the common stock of Synpro Environmental Services, Inc. ("f/k/a Sherwood Corporation") ("Synpro"), and then sell their personal stock holdings to investors at artificially high prices. In addition to making material misrepresentations about Synpro and its purported assets, Rosenfeld, Synpro's former president, and Kochanowski, Synpro's former vice president, created a market for, and facilitate the sale of, unregistered Synpro stock, by recruiting Yakimczyk, a registered representative, to sell Synpro stock to his retail customers in exchange for undisclosed kichbacks. Specifically, Rosenfeld and Kochanowski paid, or agreed to pay, Yakimczyk 20% of the number of Synpro shares he solicited his customers to purchase as compensation. Between June 1993 and November 1994, Yakimczyk solicited at least 50 retail clients to purchase Synpro common stock in the market and received at least 240,000 shares of Synpro common stock as compensation from Rosenfeld and Kochanowski. Yakimczyk never disclosed the kickback arrangement to his customers, and his conduct violated the antifraud provisions.
Yakimczyk consented to the final judgment without admitting or denying the Commission's allegations in its Complaint.
The consent judgment permanently enjoins Yakimczyk from violating Section 17(a) of the Securities Act, Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. The judgment also orders Yakimczyk to disgorge $139,562.80, the illicit profits he received from the fraudulent scheme, but waives payment of all but $15,000 of the disgorgement and prejudgment interest, and does not impose civil penalties, based on Yakimczyk's demonstrated inability to pay.
The Commission previously reached a settlement with defendant Kochanowski, but litigation is still pending against defendant Rosenfeld.
For further information contact Kay L. Lackey, Assistant Regional Director, Northeast Regional Office, 212-748-8079.http://www.sec.gov/litigation/litreleases/lr16504.htm