LAWSUITS NEWS & LEGAL INFORMATION
Paul Harary and Douglas Zemsky
Washington, DC: (Sep-24-07) A federal lawsuit was brought against Paul Harary, a Florida stockbroker, alleging that he participated in penny stock market manipulation and a kickback scheme that authorities say bilked customers of a Boca Raton, FL, brokerage firm of about $4 million. The suit claimed that Harary paid more than $1 million of kickbacks to an unnamed Florida stockbroker and left customers of an unnamed brokerage firm stuck with worthless stock in two shell companies, American Financial Holdings, Inc., formerly California Cyber Design Inc. and Secure Solutions Holding Inc. The shares traded over-the-counter and were quoted on the Pink Sheets. The SEC suspended trading in Secure Solutions Holding Inc. in mid-2005, citing questions about the accuracy of company press releases.
Harary, 43, pleaded guilty in federal court in Washington, DC, to a single criminal conspiracy charge and settled related civil claims brought by the Securities and Exchange Commission (SEC). Harary pleaded guilty to a charge of conspiracy to commit mail or wire fraud and settled with the SEC on the civil charges. Douglas Zemsky, 44, who allegedly had a hand in buying the shell companies, also reached a settlement with the SEC. Both men settled without admitting or denying the SEC's claims and agreed to be barred from the penny-stock business. Under the settlement, Harary will return about $4 million of allegedly ill-gotten gains, and Zemsky will turn over about $97,000, the SEC said. Zemsky also will be barred from serving as a public company officer or director. [FORBES: STOCKBROKER KICKBACKS]
Published on Sep-25-07
Harary, 43, pleaded guilty in federal court in Washington, DC, to a single criminal conspiracy charge and settled related civil claims brought by the Securities and Exchange Commission (SEC). Harary pleaded guilty to a charge of conspiracy to commit mail or wire fraud and settled with the SEC on the civil charges. Douglas Zemsky, 44, who allegedly had a hand in buying the shell companies, also reached a settlement with the SEC. Both men settled without admitting or denying the SEC's claims and agreed to be barred from the penny-stock business. Under the settlement, Harary will return about $4 million of allegedly ill-gotten gains, and Zemsky will turn over about $97,000, the SEC said. Zemsky also will be barred from serving as a public company officer or director. [FORBES: STOCKBROKER KICKBACKS]
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