South Florida Arbitration & Litigation Lawyer Blog
Broker/Dealer Fraud, Mismanagement and Misrepresentation FINRA Arbitration and Litigation Attorney, Russell L. Forkey, Esq.
April, 2012:
In the Matter of Scott A. Wolf
Recently, the Securites and Exchange Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions against Scott A. Wolf, currently a resident of Dubai, United Arab Emirates, based on the entry of a permanent injunction against him in the civil action entitled U.S. Securities and Exchange Commission v. Kenneth A. Dachman, et al., Civil Action Number 1:12-cv-00821, in the United States District Court for the Northern District of Illinois, Eastern Division.
The Order finds that on February 10, 2012, a final judgment was entered by consent against Wolf permanently enjoining him from violating Sections 5(a) and 5(c) of the Securities Act of 1933 and Section 15(a)(1) of the Securities Exchange Act of 1934 (Exchange Act). The Order further finds that the Commission’s complaint alleged that, between July 2008 and June 2010, Wolf and Stone Lion raised over $3.5 million from investors in Central Sleep and over $567,000 from investors in Central Sleep Florida and Advanced Sleep. Among other things, Wolf and Stone Lion prepared the initial drafts of offering materials based on information provided by Kenneth A. Dachman, the founder and chairman of all three companies, and distributed the offering materials and stock certificates to investors in exchange for a 6% commission. Wolf and Stone Lion were not registered as brokers at any time during the offerings. In addition, the complaint further alleged that no registration statement was filed with the Commission in connection with the Central Sleep securities offering and that Wolf and Stone Lion failed to provide Central Sleep investors with any disclosure documents similar to those used in registered offerings or inquire or obtain information from investors as to whether they qualified as accredited investors. Many of the investors, including friends of Wolf’s, were unsophisticated and did not qualify as accredited investors based on their net worth or income.
Based on the above, the Order bars Wolf from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization with the right to apply for reentry after one year to the appropriate self-regulatory organization, or if there is none, to the Commission. Wolf consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the entry of the permanent injunction against him.