U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19556 / February 6, 2006
Securities and Exchange Commission v. Joshua Yafa, et al., United States District Court for the Southern District of New York, Civil Action No. 05-CV-6480 (PAC)
Court Enters Consent Judgment Against Serafin Sierra in Fax Blasting Case
On February 3, 2006, United States District Judge Paul A. Crotty in New York entered judgment against Serafin Sierra, enjoining him from future violations of the anti-fraud provisions of the federal securities laws, requiring disgorgement of profits and imposing a $25,000 civil penalty. The judgment, which was entered with Sierra's consent pursuant to a settlement, resolves the case against him.
On July 18, 2005, the Securities and Exchange Commission sued two stock promoters and Sierra, an employee of a fax blasting company, for securities fraud. In its action, the Commission alleged that the three had participated in a scam designed to mislead investors into believing they had inadvertently received a confidential stock tip faxed from a stockbroker to his client. The handwritten fax had the appearance of an urgent message from a financial planner intended only for his client, "Dr. Mitchel," urging the purchase of a stock that was about to triple in price. In fact, neither the financial planner nor "Dr. Mitchel" exists. The fax was sent to more than one million recipients across the country by stock promoters who made over half a million dollars unloading their shares on duped investors.
The judgment entered against Sierra enjoins him from aiding and abetting violations of Section 10(b) of the Securities Exchange Act of 1934 and Commission Rule 10b-5.
In addition to the Commission's civil action, the United States Attorney's Office for the Southern District of New York is prosecuting a criminal action against Yafa and stock promoter Michael Pickens.