SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17158 / September 27, 2001.
SECURITIES AND EXCHANGE COMMISSION v. JAMES S. SALTZMAN
(United States District Court for the Eastern District of Pennsylvania, Civil Action No. 00 CV 2468)
James S. Saltzman, of Ambler, Pennsylvania, the former chairman of the board, assistant secretary, and treasurer of Madison Monroe, Inc., an investment adviser registered with the Commission, and the former managing general partner and investment adviser of Saltzman Partners, L.P. ("Saltzman Partners"), a Pennsylvania limited partnership, consented, without admitting or denying the allegations of the Commission's Complaint filed in the United States District Court for the Eastern District of Pennsylvania, to the entry of a Final Judgment and Order in the case. The Order permanently enjoins him from violating Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and Section 206(2) of the Investment Advisers Act of 1940, and requires him to pay disgorgement plus prejudgment interest in the amount of $1,920,340, and a civil penalty in the amount of $50,000. The Order was entered on September 19, 2001, by the Honorable Anita B. Brody.
Also on January 31, 2001, the Commission instituted and simultaneously settled an Administrative Proceeding against Saltzman pursuant to Section 203(f) of the Advisers Act. Without admitting or denying the Commission's findings, Saltzman consented to the entry of an Order suspending him from association with any investment adviser for a period of twelve months. The basis for the Administrative Proceeding against Saltzman and the Commission's findings was the entry of the Final Judgment and Order in the District Court action.
The Commission's Complaint in the District Court action alleged that from at least 1994 through February 4, 2000, Saltzman, as investment adviser to Saltzman Partners, violated the securities laws at issue by failing to disclose material information relating to loans to him by Saltzman Partners in annual financial statements of Saltzman Partners that were sent to the limited partners, namely, that he had taken out approximately $1.78 million in loans from Saltzman Partners, that by 1999 the loans amounted to approximately 20% of Saltzman Partners' assets, and that the loans violated specific terms of the loan provisions in the governing Partnership Agreement and Private Placement Memorandum. Prior to the entry of the Final Judgment and Order, Saltzman fully repaid with interest the loans he had taken from Saltzman Partners, thus satisfying the Order of disgorgement by the District Court.
[SEC v. James S. Saltzman, Litigation Release No. 16554 (May 15, 2000)]