UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16711 / September 19, 2000
Securities and Exchange Commission v. Mark Drucker, Defendant, and Michael Weinstock, Relief Defendant (N.D. Ga., Civil Action No. 1:99-CV-2687-TWT)
The Commission announced today that the Honorable Thomas W. Thrash, Jr., United States District Judge for the Northern District of Georgia, entered a default judgment against Mark Drucker (Drucker) of Atlanta, Georgia finding that Drucker violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder and permanently enjoined Drucker from violating these provisions. The Court ordered Drucker to disgorge the sum of $1,991,659.84, representing $1,852,091 in ill-gotten gains plus prejudgment interest of $139,568.84. Drucker was also ordered to pay a civil penalty of $110,000.
The Commission alleged in the complaint that from at least July 1998 through September 1999, Drucker raised approximately $6.2 million from an estimated 80 investors. Drucker solicited investors by representing that he was a successful day-trader and that investors would receive returns on their investments of 50% or more in three months or less. Drucker did not disclose to investors that he had consistently lost money trading stocks with the investors' money, that he lost in excess of $630,000 trading stocks in 1999, that he used the investment principal to pay returns to earlier investors and that he used money from investors to pay personal expenses, including hundreds of thousands of dollars to finance elaborate parties.