Kenneth Rijock

Kenneth Rijock

Wednesday, May 13, 2015

GEORGE LEVIN RESPONDS TO SEC DEMAND FOR A $181m JUDGMENT AGAINST HIM FOR OPERATING FEEDER FUND FOR ROTHSTEIN PONZI SCHEME

                                     
George Levin & Scott Rothstein
George Levin, is a Fort Lauderdale businessman with a long history of complaints filed against him by individual who were damaged by his shady business practices. A Federal civil jury recently found him guilty of securities fraud, in a case brought by the Securities & Exchange Commission, and now the regulatory agency wants an extremely large judgment entered against him, for feeding Scott Rothstein's billion dollar Ponzi scheme, and lying to his investors about every relevant aspect of the phantom, and totally unsecured, investments that he sold them.

The SEC wants the following:

(1) For violations of §5 of the Securities Act: $57m, plus $11.3m in interest, and a $5.7m civil penalty.
(2) For violations of §17(a) of the 1933 Act, and Section 10(b), and Rule 10(b)-5 of the 1934 Act: $49m, plus $9.5m in accrued interest, and a $49m civil penalty.

Levin's attorneys have now responded:

(A) The Disgorgements fail to set-off repayments made to investors.
(B) The claims for money damages are either not equitable, or improper.
(C) The Court should only impose, at most, a first-tier civil money penalty.
(D) The defendant has requested an evidentiary hearing on the SEC motions.
(E) The judgment would amount to 100 times Levin's net worth.
(F) His net worth is only $497,000, and that should be the amount of the judgment, no more.

Remember that the hedge fund promissory notes sold by Levin, to his investors, were found to be unregistered securities, and that they were secured by Rothstein's non-existent court settlements; that Levin definitely knew this, and kept that information from his clients, as well as Rothstein's rapid descent into insolvency late in the Ponzi. Testimony given at trial showed that he diverted $49m to his family. We shall await the scheduling of an evidentiary hearing, or the Court's decision on the SEC motion.

Given that, to stay enforcement on the judgment, should Levin appeal to the Eleventh Circuit, he would be required to post a supersedeas bond for $181m, if the Court ultimately enters a judgment in that amount. Where would he get collateral for such a bond ?


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