Securities and Exchange Commission
Litigation Release No. 17992 / February 21, 2003
Securities and Exchange Commission v. Yehuda Shiv, et al., 01CV11282 (AKH) (S.D.N.Y.)
The Securities and Exchange Commission ("Commission") announced that on January 23, 2003, the Honorable Alvin K. Hellerstein, United States District Judge for the Southern District of New York, entered a final judgment by consent against Yehuda Shiv ("Shiv") in SEC v. Yehuda Shiv, et al., 01CV11282 (AKH) (S.D.N.Y.). The judgment permanently enjoins Shiv from committing further violations of the antifraud provisions of the federal securities laws (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). The judgment also orders Shiv to disgorge his illicit profits of $32,215,429, plus prejudgment interest but, based on Shiv's inability to pay, waived payment of all disgorgement and prejudgment interest except the surrender of certain assets valued at approximately $2.8 million.
The Commission's complaint, filed on December 10, 2001, alleged that from 1995 through 2001, Shiv and two registered investment advisers that he controlled, Sagam Capital Management Corp. and Sagam Capital LLC, created and sent account statements to their investment advisory clients that materially misstated the value of assets in the clients' accounts. Shiv charged his clients fees based upon the inflated values of these accounts. Additionally, to conceal his fraud, Shiv made several unauthorized transfers between his clients' accounts. Shiv consented to the entry of the final judgment without admitting or denying the allegations in the Commission's complaint.