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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
BUNSIS BERBUN SECURITIES EXCHANGE COMMISSION COMPLAINT VIOLATION PROSPECTIVE INVESTORS MONIES UNITED STATES DONALD BUNSIS DISTRICT YORK LAWS COMPLAINT ALLEGES ACCOUNTING REPRESENTING MORTGAGES PAYMENTS REPAY LOANS BRIARHALL BUSINESS MOVIE MOGULS ACT ENJOIN FUTURE VIOLATIONS PROVISIONS DISGORGEMENT PLUS PREJUDGMENT CIVIL PENALTIES |
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 15127 / October 18, 1996
SECURITIES AND EXCHANGE COMMISSION v. BERBUN ASSOCIATES, INC. and
DONALD BUNSIS; CV96-5117 (E.D.N.Y.)
The Securities and Exchange Commission ("Commission")
announced the filing of a Complaint today in the United States
District Court for the Eastern District of New York against
Berbun Associates, Inc. ("Berbun") and Donald Bunsis ("Bunsis"),
alleging fraud in violation of the federal securities laws.
The Commission's Complaint alleges as follows:
Bunsis served as Berbun's principal operating officer
and, from 1988 through 1993, solicited prospective investors
in Berbun. During this same period of time, Bunsis
practiced law and accounting at Bunsis & Bunsis, located in
Garden City, New York. Bunsis and Berbun raised
approximately $2.9 million from investors by representing to
prospective investors that: (a) Berbun would invest in
secondary residential mortgages; (b) Berbun would pool
investors' monies so that each individual investor's monies
would not be invested in any one second mortgage; and (c) an
investment in Berbun was low risk. Bunsis and Berbun
offered prospective investors interest payments ranging from
8 - 12% on their investment.
The representations by Bunsis and Berbun were false
because Bunsis diverted investor monies to repay certain
favored investors, make payments to himself and his firm,
make loans to Briarhall Country Club, a business in which
Bunsis was a 50% owner, and make an investment in Movie
Moguls, Inc., a business in which Bunsis was a part-owner.
The Briarhall and Movie Moguls loans were never repaid. As
a result, Berbun failed to repay the investments made by
many of its investors.
The Complaint alleges that Berbun and Bunsis violated
Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933,
Section 10(b) of the Securities Exchange Act of 1934, and Rule
10b-5 thereunder and seeks to enjoin him from future violations
of these provisions. The Complaint also seeks disgorgement plus
prejudgment interest, civil penalties, and an accounting.
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