U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18107 / April 25, 2003
, Civil Action No. 03-382 (C.D. Cal.)
MAN CHARGED WITH CONSPIRACY TO OBSTRUCT SEC INVESTIGATION
The U.S. Attorney for the Central District of California announced
today that Richard D. McMullin was charged with conspiracy to obstruct
justice during an SEC enforcement investigation of Reed E. Slatkin,
making false statements to FBI and IRS agents, and making false
statements under oath to the bankruptcy trustee for the Slatkin
estate. From approximately 1986 until May 2001, Slatkin operated a
massive Ponzi scheme in which he solicited more than $593 million from
approximately 800 investors. McMullin, 38, of Santa Barbara, has
agreed to plead guilty to the charges when he is arraigned in May.
In his plea agreement, McMullin admitted that when the SEC began a
formal investigation of Slatkin's activities in 1999, McMullin and
Slatkin conspired to obstruct the SEC's investigation. McMullin and
Slatkin, among other things, lied to the SEC by minimizing McMullin's
role in, and knowledge of, Slatkin's bogus investment activities.
McMullin also lied to FBI and IRS agents by minimizing his own actions
and knowledge of Slatkin's Ponzi scheme. Moreover, McMullin lied
during sworn testimony to the attorney for the court-appointed
bankruptcy trustee for Slatkin's estate. McMullin did not disclose to
any of the federal investigators the huge disparity between what
Slatkin told investors and his actual investment portfolio. Between
1986 and August 1999, McMullin received nearly $2 million in salary
and bonuses from Slatkin, and he netted approximately $952,000 from
his personal investment account with Slatkin. McMullin has agreed to
pay over $1.5 million in restitution to Slatkin's victims.
On May 11, 2001, the SEC obtained a temporary restraining order and
asset freeze against Slatkin in federal district court in Los Angeles.
The Commission alleged that Slatkin defrauded hundreds of clients
through his unregistered investment advisory business located in Santa
Barbara, California.
On June 7, 2001, the U.S. District Court for the Central District of
California entered a Judgment of Permanent Injunction against Reed E.
Slatkin. The judgment enjoins Slatkin from future violations of the
antifraud provisions of Section 17(a) of the Securities Act of 1933,
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder, and Sections 206(1) and 206(2) of the Investment Advisers
Act of 1940 and the investment adviser registration provisions of
Section 203(a) of the Advisers Act. Slatkin, without admitting or
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U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18107 / April 25,
MAN CHARGED WITH CONSPIRACY TO OBSTRUCT SEC INVESTIGATION
The U.S. Attorney for the Central District of California announced today that Richard D.
From approximately 1986 until May 2001, Slatkin operated a massive Ponzi scheme in which he
McMullin, 38, of Santa Barbara, has agreed to plead guilty to the charges when he is
McMullin and Slatkin, among other things, lied to the SEC by minimizing McMullin's role in,
McMullin also lied to FBI and IRS agents by minimizing his own actions and knowledge of
McMullin lied during sworn testimony to the attorney for the court-appointed bankruptcy
McMullin did not disclose to any of the federal investigators the huge disparity between what
On May 11, 2001, the SEC obtained a temporary restraining order and asset freeze against
The Commission alleged that Slatkin defrauded hundreds of clients through his unregistered
On June 7, 2001, the U.S. District Court for the Central District of California entered a
The judgment enjoins Slatkin from future violations of the antifraud provisions of Section
Slatkin, without admitting or denying the allegations in the complaint, consented to the
Slatkin has also been barred by the Commission from associating with any investment adviser.
The U.S. Attorney's Office for the Central District of California charged Slatkin with 15
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