South Florida Arbitration & Litigation Lawyer Blog
Penny Stock Fraud, Misrepresentation and Mismanagement FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
April, 2012:
Commission Bars Peter Emrich, Frank Rossi, And Dana Valensky from Association with any Broker, Dealer, Investment Adviser, Municipal Securities Dealer, or Transfer Agent and From Participating in any Offering of a Penny Stock
Recently, the Securities and Exchange Commission (SEC) issued orders barring Peter Emrich (Emrich), Frank Rossi (Rossi), and Dana Valensky (Valensky) (jointly Respondents) from association with any broker, dealer, investment adviser, municipal securities dealer, or transfer agent and from participating in any offering of a penny stock based on their criminal convictions for offenses arising from their sale of securities in unregistered offerings.
Without admitting or denying the findings in the Orders Making Findings and Imposing Remedial Sanctions Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, except as to jurisdiction and convictions, which the Respondents each admitted, the Respondents each consented to the entry of separate orders making findings and imposing remedial sanctions.
Emrich consented to an order making the following findings:
From approximately April 1999 through May 2001, Emrich, a resident of San Rafael, California, acted as an unregistered broker-dealer by selling the securities of Out of the Black Partners LLC in unregistered private offerings (the Out of the Black Offering). Emrich held Series 7, 24, 39, and 63 licenses. On June 18, 2003, Emrich pleaded guilty to one count of conspiracy to commit securities fraud in violation of 18 U.S.C. § 371 before the United States District Court for the Eastern District of New York in United States v. Kozak, et al., 02-CR-879 (the “Kozak Case”), a criminal case arising from the Out of the Black Offering. On May 10, 2010, a criminal judgment was entered against Emrich. He was sentenced to two years probation and ordered to pay restitution of $178,775. The count of the indictment in the Kozak Case to which Emrich pleaded guilty, alleged, among other things, that between approximately April 1999 and May 2001, Emrich, and others conspired to defraud investors by concealing the actual amount of sales commissions that would be paid from the proceeds of the Out of the Black Offering.
Rossi consented to an order making the following findings:
From approximately December 1997 through December 1998, Rossi, a resident of Buffalo, New York, acted as an unregistered broker-dealer by selling the securities of Little Giant LLC in an unregistered private offering (the Little Giant Offering). From approximately October 1998 through June 2000, Rossi acted as an unregistered broker-dealer by selling the securities of Heritage Film Group LLC in an unregistered private offering (the Heritage Offering). Rossi held Series 6 and Series 63 licenses. On April 24, 2003, Rossi pleaded guilty before the United States District Court for the Eastern District of New York to two counts of conspiracy to commit securities fraud in violation of 18 U.S.C. § 371 in United States v. Leonard, et al. 02-CR-881 (the “Leonard Case”), a criminal case arising from the Little Giant Offering and the Heritage Offering. On March 21, 2011, a criminal judgment was entered against Rossi. He was sentenced to two years probation. The counts of the indictment to which Rossi pleaded guilty in the Leonard Case alleged, among other things, that Rossi and others conspired to defraud investors by concealing the actual amount of sales commissions that would be paid from the proceeds of the Little Giant and Heritage Offerings.
Valensky consented to an order making the following findings:
Valensky, a resident of Laguna Niguel, California, controlled Vanguard Entertainment Productions, Inc., a California corporation that operated as an independent sales office that offered and sold securities in the Heritage Offering. Valensky acted as an unregistered broker-dealer in the Heritage Offering. Valensky held Series 22 and 63 licenses but was not associated with an entity registered with the Commission during the Heritage Offering. Valensky pleaded guilty before the United States District Court for the Eastern District of New York to one count of conspiracy to commit securities fraud in the Leonard Case and two counts of conspiracy to commit securities fraud in U.S. v. Noorai, et al., 02-CR-880 (the Noorai Case), a criminal case arising from a private offering of securities. On November 10, 2010, a criminal judgment was entered against Valensky in the Noorai and Leonard Cases. Valensky was sentenced to concurrent terms of three years probation in the Noorai and Leonard Cases.