UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
RELEASE NO. 44441 / June 18, 2001
ADMINISTRATIVE PROCEEDING File No. 3-10510
COMMISSION INSTITUTES ADMINISTRATIVE PROCEEDINGS AGAINST ARTHUR BRUCE
BAHLAV AND FRANK J. FASANO, FORMER OWNERS OF SFI INVESTMENTS, INC.
The Commission today announced that it has instituted an
administrative proceeding against Frank J. Fasano and Arthur Bruce
Bahlav, former owners of SFI Investments, Inc. ("SFI"), a now defunct
broker-dealer. In the Order, the Division of Enforcement alleges that
Fasano and Bahlav engaged in a scheme to defraud investors at SFI. The
Order states that administrative proceedings were instituted to
determine what remedial action, if any, should be taken against Fasano
and Bahlav based upon their criminal convictions in o, No. 99 CR 135
(ERK) (E.D.N.Y) for conspiracy to commit securities fraud (as to
Fasano) and mail fraud, securities fraud and conspiracy (as to
Bahlav), and upon the entry of a final judgment in , No. 99 Civ. 11772
(S.D.N.Y. December 6, 2000) ("injunctive action").
The Order states that the complaint filed in the injunctive action
alleged that, between May 1992 and June 1995, Fasano and Bahlav
orchestrated a scheme through which they defrauded at least 24 SFI
customers of more than $1.5 million by (a) inducing investors to
purchase unsecured promissory notes from Fasano and Bahlav with
promises of high rates of return; (b) making materially false
statements, and failing to disclose material information, to investors
concerning, among other things, the use and disposition of the
securities that investors used to purchase the notes; and (c)
liquidating the investors' securities and using the proceeds to pay,
among other things, Fasano's and Bahlav's personal and business
expenses, and to pay earlier investors their interest and principal.
The final judgments in the injunctive action, which were entered on
December 6, 2000, permanently enjoined Fasano and Bahlav from
violating Section 17(a) of the Securities Act of 1933, Section 10(b)
of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. On
August 16, 1999, in connection with his criminal conviction, Bahlav
was sentenced to two and one half years in prison, three years
probation, and ordered to pay $1.45 millions in restitution. On
February 26, 1999, in connection with his criminal conviction, Fasano
was sentenced to two and one half years in prison, three years
probation, and ordered to pay $1.8 million in restitution.
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
COMMISSION INSTITUTES ADMINISTRATIVE PROCEEDINGS AGAINST ARTHUR BRUCE BAHLAV AND FRANK J.
The Commission today announced that it has instituted an administrative proceeding against
the Division of Enforcement alleges that Fasano and Bahlav engaged in a scheme to defraud
The Order states that administrative proceedings were instituted to determine what remedial
The Order states that the complaint filed in the injunctive action alleged that, between May
nd disposition of the securities that investors used to purchase the notes; and liquidating the
The final judgments in the injunctive action, which were entered on December 6, 2000,
On August 16, 1999, in connection with his criminal conviction, Bahlav was sentenced to two
The Division of Enforcement alleges, among other things, that Fasano and Bahlav defrauded at
The Order states that Fasano and Bahlav were convicted of securities fraud by the U.S.
The Order states that the administrative proceeding was commenced to determine what remedial
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