(HedgeCo.Net) The United States District Court for the Eastern District of New York has entered a final judgment against Shimon Rosenfeld, Esq., an attorney and resident of Brooklyn, New York whom the SEC alleged engaged in an illegal offering fraud scheme.
The SEC’s complaint, filed July 12, 2021, alleged that between May 2014 and March 2018, Rosenfeld solicited investors by promising them that he would pool their funds to purchase and then resell real estate for a profit, which he would then split with the investors. According to the complaint, the investors provided Rosenfeld with approximately $7 million for the proposed real estate transactions. The complaint alleges that, contrary to what Rosenfeld told investors, he never used investor funds to purchase any real estate. Instead, Rosenfeld allegedly misappropriated the investor funds and used them to trade securities in his own personal brokerage account. According to the complaint, while Rosenfeld returned approximately $1 million to investors, his undisclosed and unsuccessful securities trading resulted in the loss of the remaining $6 million of investor funds.
On October 22, 2021, the Court entered a consent judgment against Rosenfeld, enjoining him from future violations 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. On July 5, 2022, a final judgement on consent was entered against Rosenfeld ordering him to pay disgorgement of $5,997,525, plus prejudgment interest of $1,104,353.84, which is deemed satisfied by the payment of restitution and forfeiture ordered in the parallel criminal action, United States v. Rosenfeld, 21-CR-236 (KAM) (E.D.N.Y.).
In the parallel criminal action, Rosenfeld was sentenced to a prison term of 6 months followed by 3 years of supervised release and ordered to make restitution in the amount of $6,787,525 and $4 million in forfeiture.