U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 20081 / April 19, 2007 SEC v. Sherwin P. Brown, Jamerica Financial and Brawta Ventures, Civil Action No. 06-1213 (D. Minn.) (Magnuson, J.) The Securities and Exchange Commission ("Commission") announced that on April 3, 2007, the Commission filed a motion for a civil contempt against Sherwin P. Brown ("Brown") and Jamerica Financial, Inc. ("Jamerica") for violating the Agreed Order of Preliminary Injunction and Asset Freeze ("Preliminary Injunction") entered by the Honorable Paul A. Magnuson of the United States District Court for the District of Minnesota on April 14, 2006. The Preliminary Injunction prohibited Brown and Jamerica from violating certain antifraud and recordkeeping violations of the federal securities laws.
The Commission filed an emergency action on March 29, 2006, against Brown, Jamerica, a Minneapolis, Minnesota-based investment advisor of which Brown serves as the majority owner and President, and Brawta Ventures, LLC ("Brawta"), the private investment fund formed by Brown and Jamerica. The complaint alleged that Brown and Jamerica raised at least $1.65 million from 53 investors for Brawta. The Commission further alleged that the defendants defrauded the investors of Brawta by misappropriating at least $569,950 of investor funds to pay for Brown's personal expenses and Jamerica's business expenses, and by misrepresenting the value of Brawta to the investors by failing to disclose or account for the funds that were diverted.
In its motion for civil contempt, the Commission submitted evidence that Brown and Jamerica, in violation of the Preliminary Injunction, continued to provide false valuations to the investors of Brawta, which substantially overstated the value of their investment. In support of its motion for civil contempt, the Commission submitted evidence that the true value of Brawta was worth less than half of what Brown and Jamerica claimed it to be. In addition, the Commission contended that Brown and Jamerica have failed to make and keep true, accurate and current records relating to the business of Jamerica, also in contempt of the Preliminary Injunction.
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 20082 / April 19, 2007 Accounting and Auditing Enforcement Release No. 2597 / April 19, 2007 SEC v. Sanjay Kumar and Stephen Richards, 04 Civ. 4104 (E.D.N.Y.)(Glasser, I.L.). Final Judgment Entered Against Defendant Sanjay Kumar The Securities and Exchange Commission announced that on April 13, 2007, the United States District Court for the Eastern District of New York entered a final judgment on consent against Sanjay Kumar, the former CEO and Head of Sales at Computer Associates International, Inc., ("CA"). The Final Judgment against Kumar does not impose a civil penalty or disgorgement based on Kumar's obligation to pay restitution payments in the criminal action, United States v. Kumar et ano., S2-04 Cr. 846 (ILG). Kumar consented, without admitting or denying the allegations against him, to a judgment that reincorporates equitable relief previously ordered by the Court, including permanent injunctions prohibiting Kumar and Richards from violating Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a) and 13(b) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1, 13a-13, and 13b2-1 promulgated thereunder, and an order barring Kumar from serving as an officer or director of a publicly held company.
Previously, on April 24, 2006, Kumar pleaded guilty to eight felony criminal charges in the related criminal case brought by the United States Attorney's Office for the Eastern District of New York. On November 27, 2006, Judge I. Leo Glasser sentenced Kumar to serve a 12 year prison term. On April 13, 2007, Judge Glasser entered a Stipulation and Order in the criminal action imposing a Restitution Judgment against Kumar in the amount of $798,600,000, and directing Kumar to pay $40 million on or before April 30, 2007, $10 million on or before July 31, 2007, and $2 million on or before December 31, 2008. Judge Glasser directed Kumar to pay the balance of the restitution obligation upon release from incarceration by annual payments of 20% of Kumar's income.
On September 22, 2004, the Commission filed complaints alleging that Kumar and violated the anti-fraud and other provisions of the federal securities laws. The Commission alleged that from 1998 to 2000, CA routinely kept its books open to record revenue from contracts executed after the quarter ended in order to meet Wall Street quarterly earnings estimates. In total, CA prematurely recognized over $3.3 billion in revenue. In addition, Kumar obstructed the Commission's investigation into the company's accounting practices.
The Commission acknowledges the assistance and cooperation of the United States Attorney's Office for the Eastern District of New York and the Federal Bureau of Investigation in this matter.
For further information see Litigation Releases No. 18552 (January 22, 2004), No. 18665 (April 8, 2004), No. 18891 (September 22, 2004), No. 18954 (November 2, 2004), No. 19730 (June 19, 2006), and No. 19898 (November 3, 2006).
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 20083 / April 20, 2007 Accounting and Auditing Enforcement Release No. 2598 / April 20, 2007 Securities and Exchange Commission v. Bernard Shinder, Civil Action No. 6:05-cv-0139 (M.D. Fla.). Florida Court Orders Boca Raton Man Charged With Fraud To Pay $120,000 Penalty The Securities and Exchange Commission today announced that the federal court in Orlando entered a final judgment on April 16, 2007 against Bernard Shinder, of Boca Raton, Florida, ordering him to pay a $120,000 penalty.
Shinder, without admitting or denying the allegations against him, consented to the entry of the judgment in the United States District Court for the Middle District of Florida.
This judgment concludes the Commission's litigation concerning Bio One Corp., a nutritional supplement company located in Winter Springs, Florida where Shinder served as CFO. The Commission's complaint alleged fraud and other securities law violations against Shinder and Bio One's former CEO Armand Dauplaise.
Shinder had previously consented to a permanent injunction that enjoins him from future violations of the federal securities laws and bars him from acting as an officer or director of any public company.
For additional information, including details of the complaint's allegations and the prior injunctions against Shinder and Dauplaise, see Litigation Release Nos. 19387 (Sept. 22, 2005), No. 19643 (April 6, 2006), and No. 19808 (Aug. 17, 2006).
Market Data 
Markets 
AI
