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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
DRINKWINE UNIT TRUST SECURITIES FUNDS ACCOUNTS CLIENTS COMPLAINT EXCHANGE FALSELY REPRESENTING VIOLATION YORK ACT PURPORTING SCHEME PROMISES GUARANTEEING RETIREMENT SCHOOL TEACHER FRAUDULENT COMPLAINT ALLEGES FINANCIAL ADVISER DISTRICT WAYNE EXCHANGE COMMISSION CIVIL PENALTIES DISGORGEMENT PLUS PREJUDGMENT PROVISIONS FUTURE VIOLATIONS ENJOIN |
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UNITED STATES SECURITIES AND EXCHANGE
LITIGATION RELEASE NO. 14781 / January 16, 1996
SECURITIES AND EXCHANGE COMMISSION v. WAYNE T. DRINKWINE,
96 Civ. 0182 (JH) (MO), (E.D.N.Y.)
NEW YORK -- 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
financial adviser Wayne T. Drinkwine ("Drinkwine"), age 44, of
Eastport, New York, alleging fraud in violation of the federal
securities laws.
The Commission's Complaint alleges as follows:
From March 1990 through March 1995, Drinkwine, while
working as a financial adviser and registered
representative, fraudulently solicited at least five of his
school teacher clients to invest an aggregate of
approximately $450,000 in non-existent securities he
described as "unit trusts." Drinkwine's clients were
current and retired school teachers from Long Island who
maintained investment accounts that contained their
retirement funds. Drinkwine made various material
misrepresentations and omissions concerning the "unit
trust," including: (a) falsely guaranteeing investors a 10%
annual return on their investments in the "unit trust;" (b)
falsely representing that all principal invested in the
"unit trust" was guaranteed and not at risk; and (c) falsely
representing that the "unit trust" would invest in real
estate. Instead of investing his clients' funds as
promised, Drinkwine secretly diverted approximately $420,000
into his personal bank accounts and misappropriated such
funds for his personal benefit.
In furtherance of his scheme, Drinkwine sent his
clients: (a) letters purporting to confirm their
investments in the "unit trust," which also contained false
promises to pay 10% annual interest and to repay all
principal; and (b) written account statements which
purported to reflect the investments in the "unit trust."
In addition, Drinkwine used approximately $30,000 of
investors funds to make sporadic interest payments to his
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