United States Securities and Exchange Commission
Litigation Release No. 18071 / April 4, 2003
SEC v. Robert C. Ingardia (United States District Court for the Southern District of New York, Case No. 01-CV-8356 (WHP), filed September 6, 2001)
Commission Settles Fraud Charges Against Robert C. Ingardia
The Securities and Exchange Commission ("Commission") announced that, on March 5, 2003, the Honorable William H. Pauley, United States District Judge for the Southern District of New York, entered, by consent, a final judgment against Robert C. Ingardia, a former New York City-based registered representative. On September 6, 2001, in the case of SEC v. Robert C. Ingardia, Case No. 01-CV-8356 (S.D.N.Y.) (WHP), the Commission sought and obtained a temporary restraining order prohibiting Ingardia from violating the antifraud provisions of the federal securities laws. In its Complaint, the Commission alleged that, from at least June through September 2001, Ingardia, who had been employed at several broker-dealers including Joseph Stevens & Co. and the now defunct Mason Hill & Co., began making telephone calls to several other brokerage firms, including Fidelity Investments, Charles Schwab & Co. and Brown & Co., in which he assumed the identity of his present and former Joseph Stevens and Mason Hill customers. The Complaint further alleged that, after he had successfully assumed the identity of his customers, Ingardia would generally, without authorization, liquidate the accounts by placing unauthorized orders to sell all or many of the stock positions it contained. Using the cash proceeds of the liquidation, Ingardia would then place unauthorized orders to buy large quantities of penny stock in either Converge Global, Inc. ("Converge"), a Utah corporation formerly headquartered in Santa Monica, California or Equity Technologies & Resources, Inc. ("ETCR"), a Delaware corporation headquartered in Lexington, Kentucky. On November 8, 2001, the Commission obtained a preliminary injunction restraining Ingardia from violating the antifraud provisions of the federal securities laws.
The Commission's Complaint was based on some of the same underlying facts as a criminal complaint filed against Ingardia by the United States Attorney's Office for the Southern District of New York on August 31, 2001. On February 4, 2002, in the case of United States v. Robert Ingardia, Crim. Information No. 02 Cr. 137 (S.D.N.Y.), Ingardia pled guilty to one count of conspiracy to commit securities fraud, mail fraud and wire fraud, in violation of Title 18 United States Code, Section 371, and to three counts of securities fraud in connection with trading in Converge, ETCR and Safe Idea, Inc. common stocks, in violation of Title 15 United States Code, Sections 78j(b) and 78ff and Title 17 Code of Federal Regulations, Section 240.10b-5. Ingardia was sentenced, on July 24, 2002, to a prison term of 15 months followed by 24 months of supervised release and was ordered to make restitution in the amount of $157,196.03 and to pay a special assessment of $400. Ingardia is currently incarcerated at the Fort Dix Federal Correctional Institution in New Jersey.
Without admitting or denying the Commission's allegations against him, Ingardia consented to the entry of a final judgment permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder.
On April 2, 2003, based on the entries of the civil injunction and the criminal conviction against Ingardia, the Commission instituted settled public administrative proceedings against Ingardia. Without admitting or denying the Commission's findings, Ingardia consented to the entry of the Commission's order which bars him from association with any broker or dealer and from participating in any future offering of a penny stock. For further information, see Litigation Release Nos. 17117 (September 6, 2001) and 17245 (November 21, 2001).