UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17017 / May 24, 2001
Securities and Exchange Commission v. Pacific Air Transport, Inc. and Robert B. Hirsch, Civ. No. 00-05854 (C.D. Cal.)
On May 18, 2001, the U.S. District Court for the Central District of California entered Final Judgments of Permanent Injunction against Pacific Air Transport and its former president, Robert B. Hirsch. The final judgments, which were entered with the consent of the defendants, and enjoin Pacific Air and Hirsch from future violations of the antifraud and registration provisions of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Court also ordered disgorgement of ill-gotten gains against Pacific Air in the amount of $1.2 million, plus prejudgment interest of $164,692, though these amounts were waived due to the fact that Pacific Air is now defunct. The Court assessed a civil penalty against Hirsch in the amount of $20,000.
The Securities and Exchange Commission filed a civil action against Pacific Air and Hirsch on May 31, 2000, alleging that the defendants had engaged in a fraudulent securities offering. In its complaint, the Commission alleged that, from November 1998 through September 1999, Pacific Air raised millions of dollars from investors in 22 states from the sale of "secured" promissory notes. Pacific Air primarily marketed the notes, which promised interest rates ranging from 12% to 13%, through a sales network of insurance agents. In addition to promising returns in excess of similar fixed investments, Pacific Air represented that investor funds were guaranteed by an offshore insurance company.
For additional information, see Litigation Release No. 16569 (May 31, 2000).