UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16621 / July 6, 2000
SEC v. REFAEL SHAOULIAN, U.S. District Court for the Central District
of California, Civ. Action No. 00-04614 (CBM) (C. D. Cal. May 3, 2000)
as amended (July 6, 2000)
The Securities and Exchange Commission announced that on May 3, 2000,
the U.S. District Court for the Central District of California issued
a temporary restraining order against 24 year-old Refael Shaoulian
("Shaoulian") barring him from violations of the antifraud provisions
of the federal securities laws. The Court, also on May 3^rd, issued an
asset freeze against Shaoulin and his father, Samuel Shaoulian.
In its original complaint filed on May 3^rd ("Original Complaint"),
the Commission alleged that Shaoulian used the Internet to manipulate
the price of a thinly traded stock by spreading false information to
various Internet message boards, allowing him to reap more than
$172,000 in trading profits. The Original Complaint, also named
Shaoulian's father, Samuel Shaoulian, as a relief defendant based on
his receipt of ill-gotten gains from the manipulation. Based upon
evidence of additional manipulations by Shaoulian, on July 6, 2000,
the Commission filed an amended Complaint ("Amended Complaint")
charging that from April 1999 through July 1999, Shaoulian engaged in
virtually identical Internet pump and dump schemes involving four
additional stocks. With these four additional stock manipulations
charged against Shaoulian, the Commission is seeking more than
$388,000 in disgorgement from Shaoulian, his father and brother, as
well as civil penalties against Shaoulian. The Amended Complaint also
names Shaoulian's brother, Rabin Shaoulian of Beverly Hills, as a
relief defendant because he received some of the ill-gotten gains from
the manipulations.
According to the Commission's Original Complaint, in January 2000,
Shaoulian manipulated the common stock price of Universal Standard
Healthcare, Inc. ("Universal"), a stock traded through the NASD's OTC
Bulletin Board system, by posting numerous false messages on Internet
message boards. The Complaint alleges that Shaoulian, a 24 year-old
Beverly Hills resident and UCLA graduate, obtained more than $172,000
in profits from his Internet pump and dump manipulation of Universal
stock. Shaoulian did so by first buying a large block of Universal
shares between January 24 and 26, 2000. According to the Complaint,
during the weekend of January 29^th and 30^th, Shaoulian posted
hundreds of messages, under multiple pseudonyms, to Internet financial
message boards using publicly available computers located on the UCLA
campus. These messages falsely stated that Universal was about to be
purchased by another company and that Universal was profitable. In
SNIPPETS:
SEC v. REFAEL SHAOULIAN, U.S. District Court for the Central District of California, Civ.
The Securities and Exchange Commission announced that on May 3, 2000, the U.S. District Court
In its original complaint filed on May 3^rd, the Commission alleged that Shaoulian used the
The Original Complaint, also named Shaoulian's father, Samuel Shaoulian, as a relief
Based upon evidence of additional manipulations by Shaoulian, on July 6, 2000, the Commission
With these four additional stock manipulations charged against Shaoulian, the Commission is
The Amended Complaint also names Shaoulian's brother, Rabin Shaoulian of Beverly Hills, as a
According to the Commission's Original Complaint, in January 2000, Shaoulian manipulated the
The Complaint alleges that Shaoulian, a 24 year-old Beverly Hills resident and UCLA graduate,
Shaoulian did so by first buying a large block of Universal shares between January 24 and 26,
Each of these stocks traded on the OTC Bulletin Board at the time of these manipulations.
In each instance, the Commission alleges that Shaoulian purchased a substantial block of
In a related action, the Commission today announced civil charges against two other
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