SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16653 \ August 16, 2000
SECURITIES AND EXCHANGE COMMISSION v. PRECIOUS STONES TRADING
WORLDWIDE, INC., RUSLAN RAPOPORT, EDWARD LANDENBAUM, AND IGOR
LANDENBAUM, 00 Civ. 6097 (NRB) (S.D.N.Y.)
The Commission announced that it filed a Complaint today in the United
States District Court for the Southern District of New York, charging
three individuals and one entity with having defrauded at least 208
investors of approximately $5.5 million through the sale of
unregistered common stock of Precious Stones Trading Worldwide, Inc.
("Precious Stones") -- a company purportedly engaged in the business
of buying and selling rare art, coins, and gemstones from Eastern
Europe, Russia and South America. The Commission alleges that the
individuals charged in the Complaint diverted the proceeds raised from
the fraudulent scheme to themselves and to pay personal expenses.
Named in the Complaint are
Precious Stones, a Delaware corporation located in New York, New York;
Ruslan Rapoport, a 26 year old resident of Manhattan, who held himself
out as the promoter, beneficial owner, president, director and
executive officer of Precious Stones;
Edward Landenbaum ("E. Landenbaum"), a 28 year old resident of
Brooklyn, New York; and
Igor Landenbaum a/k/a Michael Landenbaum ("I. Landenbaum"), a 38 year
old resident of Brooklyn, New York.
The Complaint alleges as follows From October 1997 to April 2000,
Rapoport, E. Landenbaum, and I. Landenbaum, through Precious Stones
(collectively, the "Defendants"), conducted a fraudulent, unregistered
offering of Precious Stones stock. Among other things, Defendants
falsely represented to investors that Precious Stones would commence
an initial public offering ("IPO") in the near future and that the
proceeds of the sale of Precious Stones stock would be used to finance
Precious Stones' alleged business. In fact, Precious Stones was not
engaged in any business except defrauding investors, there was no real
possibility that Precious Stones would successfully conduct an IPO and
Defendants diverted the bulk of the proceeds raised from the offering
to themselves and to pay personal expenses.
The Commission alleges that, through this conduct, Defendants violated
the antifraud provisions set forth in Section 17(a) of the Securities
Act of 1933 ("Securities Act") and Section 10(b) of the Securities
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. PRECIOUS STONES TRADING
WORLDWIDE, INC., RUSLAN RAPOPORT, EDWARD LANDENBAUM, AND IGOR
The Commission alleges that the individuals charged in the Complaint diverted the proceeds
Precious Stones, a Delaware corporation located in New York, New York;
Ruslan Rapoport, a 26 year old resident of Manhattan, who held himself out as the promoter,
Igor Landenbaum a/k/a Michael Landenbaum, a 38 year old resident of Brooklyn, New York.
Defendants falsely represented to investors that Precious Stones would commence an initial
In fact, Precious Stones was not engaged in any business except defrauding investors, there
The Commission alleges that, through this conduct, Defendants violated the antifraud
In addition, the Commission alleges that Rapoport, E. Landenbaum, and I. Landenbaum violated
The Commission seeks a final judgment permanently enjoining the Defendants from violating
The Commission thanks the United States Attorney's Office for the Southern District of New
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