 UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 17017 / May 24, 2001
Securities
and Exchange Commission v. Pacific Air Transport,
Inc. and Robert B. Hirsch, Civ. No. 00-05854 (C.D.
Cal.)
On
May 18, 2001, the U.S. District Court for the
Central District of California entered Final Judgments
of Permanent Injunction against Pacific Air Transport
and its former president, Robert B. Hirsch. The
final judgments, which were entered with the consent
of the defendants, and enjoin Pacific Air and
Hirsch from future violations of the antifraud
and registration provisions of Sections 5(a),
5(c) and 17(a) of the Securities Act of 1933,
and Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 thereunder. The Court also
ordered disgorgement of ill-gotten gains against
Pacific Air in the amount of $1.2 million, plus
prejudgment interest of $164,692, though these
amounts were waived due to the fact that Pacific
Air is now defunct. The Court assessed a civil
penalty against Hirsch in the amount of $20,000.
The
Securities and Exchange Commission filed a civil
action against Pacific Air and Hirsch on May 31,
2000, alleging that the defendants had engaged
in a fraudulent securities offering. In its complaint,
the Commission alleged that, from November 1998
through September 1999, Pacific Air raised millions
of dollars from investors in 22 states from the
sale of "secured" promissory notes.
Pacific Air primarily marketed the notes, which
promised interest rates ranging from 12% to 13%,
through a sales network of insurance agents. In
addition to promising returns in excess of similar
fixed investments, Pacific Air represented that
investor funds were guaranteed by an offshore
insurance company.
For
additional information, see Litigation
Release No. 16569 (May 31, 2000).
from:
http://www.sec.gov/litigation/litreleases/lr17017.htm
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