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U.S. SECURITIES AND
EXCHANGE COMMISSION
Litigation Release No. 15636 / February 5, 1998
SECURITIES AND EXCHANGE COMMISSION v. D'ACQUISTO FINANCIAL
GROUP, INC., et
al., Civil Action No. 95-1105 BTM
(AJB) (S.D. Cal.)
The Securities and Exchange Commission announced that on January
28,
1998, the Honorable Barry T. Moskowitz United States District
Judge of the
Southern District of California entered
a final judgment against Thomas F.
Goodman.
The Court held Thomas F. Goodman, an attorney, liable
for
securities fraud and ordered him to pay $99,500 in disgorgement
and
$22,140.49 in prejudgment interest
jointly and severally with his co-
defendants John F. D'Acquisto, Doubleday
Trust, and D'Acquisto Financial
Group, Inc.
The Court found that an injunction should issue against
Goodman, barring him from future violations of the securities
laws. In
reaching
its decision, the Court found that Goodman principally
participated
in the fraud when he prepared and issued prospectuses
that
promoted
the fraudulent schemes in clear violation of the
law. The
fraudulent schemes involved the sale
of $7,000,000 worth of "inherently
fraudulent" "prime
bank" securities.
Goodman, along with D'Acquisto, sold the fraudulent securities
through
Doubleday and D'Acquisto Financial Group from November 1993
through June
1994. Goodman
represented to investors that the "prime
bank" securities
were
"entirely legal" and the "crown
jewel" of Doubleday's investment
program. Goodman
made these representations without investigating
whether
such
securities actually existed.
The
Court found that these
misrepresentations violated Section
17(a) of the Securities Act of 1933 and
Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5
thereunder.
In earlier rulings, the Court found that D'Acquisto, Doubleday
and
D'Acquisto Financial Group misrepresented to one investor that
its $200,000
investment would be worth $1,833,565.64
in a week's time; represented to
another investor that it would
receive returns of 2% to 7.5% per week; and
represented to a third investor
that it would receive returns of at least
80%
per month.
The Court held Goodman's co-defendants
jointly and
severally liable for $6,780,000 in
disgorgement and $641,471.27 in
prejudgment interest.
In a recent administrative matter, the Securities and Exchange
Commission revoked D'Acquisto's registration as an investment
adviser and
barred him from associating with
an investment adviser.
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