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SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON
D.C.
Litigation Release No. 15199 / December 26, 1996
SECURITIES AND EXCHANGE COMMISSION V. RICHARD M. SIMONSON,
96 Civ. 9695, U.S.D.C., S.D.N.Y.
On December 26, 1996, the Securities and Exchange Commission
charged Richard M. Simonson with violations of the antifraud
provisions of the federal
securities laws for falsely promising
high
returns on fictitious investments known as "prime
bank"
securities, as well as for making other material
misrepresentations and omissions to potential investors.
Named in the Complaint filed today in the United States District
Court for the Southern District
of New York is:
Richard M. Simonson,
a resident of New York, New York.
The Complaint
alleges that, from approximately June 1995
through October 1995, Simonson violated Section 17(a) of the
Securities Act of 1933 ("Securities Act")
and was about to
violate
Section 10(b) of the Securities Exchange Act of
1934 ("Exchange Act") and Rule 10b-5 thereunder
by fraudulently
offering
to sell fictitious securities to members of the
public.
The Complaint
alleges that Simonson solicited at least four individuals in an attempt to convince them to invest
approximately $10 million each in his "Bank Instrument
Purchase
Program,"
an elaborate scheme involving the purported purchases
and sales of non-existent securities in the form of
notes which
were
purportedly issued by high quality European banks,
referred
to as "prime banks." The Complaint alleges
that, in connection
with
the offer of these securities, Simonson made numerous misrepresentations and omissions of material fact, including,
among
other things, the use of investors' funds, the
risks associated with the investments, the ability to pay
the promised
interest
rates, and the existence of the "prime bank"
instruments.
The Complaint
seeks an Order which permanently enjoins
Simonson
against future violations of the antifraud provisions
of the Securities Act and the Exchange Act, and which orders
the payment
of civil penalties, as well as other equitable
relief.
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