Broker/Dealer, Hedge Fund and Investment Fraud, Misrepresentation and Mismanagement FINRA Abitration and Litigation Attorney, Russell L. Forkey, Esq.
SEC v. Aragon Capital Advisors LLC, et al.
The U.S. District Court for the Southern District of New York (Hon. Frank Maas) signed a consent judgment on April 4, 2012 requiring Defendants in the Securities and Exchange Commission’s (Commission) long-running insider trading case to pay an additional $1 million to resolve the Commission’s case. Under the Judgment, Defendants Zvi Rosenthal (Zvi), Amir Rosenthal (Amir), Ayal Rosenthal (Ayal) and Oren Rosenthal (Oren) and Relief Defendants Rivka Rosenthal, Efrat Rosenthal and Noga Delshad Rosenthal will disgorge $1,072,000, in addition to the $1.5 million they have already paid. The Judgment also includes a permanent injunction against Zvi, Amir and Ayal from further violations of the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, and permanently bars Zvi from acting as an officer or director of any public company. With earlier judgments entered against other Defendants originally charged, the Commission will have collected more than $3 million in illicit profits earned in this scheme.
The case arose out of a five year insider trading scheme by which Zvi, a former pharmaceutical company executive, passed material nonpublic information about the company’s financial performance and FDA new drug approvals to his son, Amir, who traded on that information for his and his family’s benefit, and, the complaint alleged, on occasion, Amir also tipped his brothers, Ayal and Oren, so they could trade themselves. At the time the Commission’s complaint was filed, in February 2007, the United States Attorney’s Office for the Eastern District of New York filed criminal charges against Zvi, Amir and Ayal, charging four of the same instances of insider trading that the S.E.C. had charged. The criminal complaint was resolved when the defendants pled guilty, and they were each subsequently sentenced to imprisonment, with Zvi spending 60 months, Amir, 33 months and Ayal, two months, in jail. [SEC v. Aragon Capital Advisors LLC, et al., Civ. Action 07-919 (S.D.N.Y.)]