U.S. Securities and Exchange Commission
Litigation Release No. 17796 / October 22, 2002
U.S. v. Daniel W. Jacobs, CR 02-1108 (C.D. Cal.)
Man Charged with Conspiracy to Obstruct SEC Investigation
The U.S. Attorney for the Central District of California and the Securities and Exchange Commission announced that Daniel W. Jacobs was charged with conspiracy to obstruct justice during an SEC enforcement investigation of Reed E. Slatkin. From approximately 1986 until May 2001, Slatkin operated a massive Ponzi scheme in which he solicited more than $593 million from approximately 800 investors. Jacobs has agreed to plead guilty to the charge when he is arraigned in November.
In his plea agreement, Jacobs admitted that when the SEC began a formal investigation of Slatkin's activities in 1999, Jacobs and others conspired to obstruct the SEC's investigation. Jacobs and others, among other things, provided the SEC with false documents concerning NAA Financial, a purported Swiss brokerage firm in which Slatkin purportedly held his investors' funds. For his role, Jacobs received $1 million and a quantity of gold coins from Slatkin. Specifically, Jacobs:
On May 11, 2001, the SEC obtained a temporary restraining order and asset freeze against Slatkin in federal district court in Los Angeles. The Commission alleged that Slatkin defrauded hundreds of clients through his unregistered investment advisory business located in Santa Barbara, California.
On June 7, 2001, the U.S. District Court for the Central District of California entered a Judgment of Permanent Injunction against Reed E. Slatkin. The judgment enjoins Slatkin from future violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 and the investment adviser registration provisions of Section 203(a) of the Advisers Act. Slatkin, without admitting or denying the allegations in the complaint, consented to the entry of the injunction. Slatkin has also been barred by the Commission from associating with any investment adviser.
The U.S. Attorney's Office for the Central District of California charged Slatkin with 15 felony charges, including mail and wire fraud, money laundering and conspiracy to obstruct justice during an SEC enforcement investigation. Slatkin pleaded guilty and is scheduled to be sentenced on February 24, 2003.