Conversion Solutions Holdings (fka CSHD)

[zomniac]

How's Cory Ribotsky (of AJW fame) doing nowadays.......



NEW YORK—JULY 10, 2010- A former investment analyst from Corey Ribotsky's hedge-fund firm, NIR Group LLC, has pleaded guilty to securities fraud and two other charges, according to court documents.

The former analyst, Daryl Dworkin, pleaded guilty to the charges on Wednesday in the U.S. District Court for the Eastern District of New York, in Brooklyn. He faces a maximum 20 years in prison for one count of securities fraud, five years for one count of conspiracy to commit securities fraud and another five years for conspiracy to promote unlawful activity across state lines.

News of Mr. Dworkin's guilty plea was reported earlier by Forbes.

"At the time that Mr. Dworkin was in NIR's employ, NIR and Mr. Ribotsky were unaware of any criminal activity in which Mr. Dworkin engaged," said Jordan Hershman of Bingham McCutchen, counsel to NIR and Mr. Ribotsky.

Mr. Hershman pointed to wording from the court documents that says Mr. Dworkin "took steps to conceal the kickbacks (he received) from NIR's senior management."

Added Mr. Hershman: "The company is cooperating fully with the government's investigation. It is confident that the facts will show that NIR and Mr. Ribotsky acted properly at all times."

Jonathan Marks, Mr. Dworkin's lawyer, declined to comment.

Federal authorities have been investigating the Roslyn, N.Y.-based NIR Group and founder Mr. Ribotsky since at least 2009, The Wall Street Journal reported. Some of the activities that were under investigation, including possible kickback schemes and defrauding of investors, are acts to which Mr. Dworkin pleaded guilty, according to the criminal information filed in court. Mr. Ribotsky hasn't been charged.

The firm specializes in private investments in public-equity transactions, or PIPEs.

The court document said that among other things, Mr. Dworkin made false statements and material omissions to NIR investors, including about the assets held in NIR's PIPE funds. Mr. Dworkin's guilty plea also says he accepted kickback payments from two co-conspirators—two "corrupt" PIPE deal finders—whose identities weren't disclosed but are known to the U.S. Attorney.

In 2008, citing rough market conditions that made it difficult to sell holdings, NIR suspended redemptions in its biggest fund, AJW Offshore II. As of February 2010, it had returned a small amount of money to investors.

While it specialized in PIPEs, NIR is also known for managing a risky, mortgage-backed collateralized debt obligation for Merrill Lynch & Co. in 2006 and 2007, called Norma. Like most CDOs backed by risky mortgages, investors in Norma were hit by losses when its credit rating was slashed and the mortgage market collapsed. NIR earned fees as Norma's manager.

Write to Joseph Checkler at [e-mail]
http://online.wsj.com/article/SB10001424052748704075604575356914031167000.html?mod=WSJ_business_whatsNews
http://blogs.forbes.com/streettalk/2010/07/09/convicted-analyst-points-finger-at-nir-group-founder-ribotsky/