UNITED STATES SECURTIES AND EXCHANGE COMMISSION
Litigation Release No. 17200 / October 22,2001
Securities and Exchange Commission v. Vestron Financial Corp., et al., Case No. 01-4269-CIV-SEITZ (USDC/SD FL)
The Securities and Exchange Commission ("SEC") announced that on October 16, 2001, the SEC filed a Complaint against Vestron Financial Corporation ("Vestron Financial"), a company with principal offices in Miami, alleging that Vestron Financial had raised more than $11.6 million from about 350 investors across the nation and overseas through the sale of unregistered securities. That same day, the Honorable Patricia A. Seitz, United States District Judge for the Southern District of Florida, entered an emergency Order to temporarily freeze the assets of Vestron Financial and that of its founder and president, Salman Shariff ("Shariff"), who was last known to reside in Miami Beach, Florida. Vestron was purportedly in the business of trading stocks and commodities.
In its Complaint and application to the Court for a temporary asset freeze order, which the Court granted, the SEC also alleged that Vestron Financial had lured investors into investing with the company through false promises of high returns and under the false pretense that their money would be used to engage in stock and commodities trading. More specifically, according to the SEC's complaint, of the $11.6 million raised from investors, only 14% of these funds were actually used for stock and commodities trading. Instead, the complaint alleges that defendant Shariff has misappropriated at least $2.082 million in investor funds for his own personal use, including the purchase of a condominium, a boat, cars and other personal items. In addition, the SEC alleges that defendants were engaged in a Ponzi scheme, whereby investors who chose to receive their purported monthly gains in cash were paid out of new investor funds, as the little trading that was done was far from profitable.
Named as defendants in the SEC's Complaint in addition to Vestron Financial and Shariff were:
Named as relief defendants in the SEC's Complaint were:
The Commission charges Vestron Financial and Shariff with violations of Sections 5(a), 5(c) and 17(a) of the Securities Act, Sections 10(b) and 15(a)(1) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisors Act. The Commission also charges Vestron Investment Club and Crescent Capital Partners, LP with violations of Sections 5(a) and 5(c) of the Securities Act and Section 7(a) of the Investment Company Act, and Crescent Capital Offshore Fund with violations of Sections 5(a) and 5(c) of the Securities Act and Section 7(d) of the Investment Company Act. The SEC is also seeking in this lawsuit a preliminary order, which would continue the asset freeze pending the outcome of the case on the merits, as well as permanent injunctions, disgorgement of ill-gotten profits and money penalties.