Sunday, October 6, 2013


The SEC has brought a civil action* against the senior banker that it claims was responsible for the accounts of convicted attorney-Ponzi schemer Scott Rothstein's law firm. Frank Spinosa, who was TD Bank's Regional Vice President, and who is charged with facilitating Rothstein's billion dollar fraud. reportedly misled investors, through false documents, and untrue oral statements.

The Securities & Exchange Commission complaint alleges:

(1) Three counts of violations of Section 17(b) of the Securities Act of 1933
(2) One count of violation of Section 10 of the 1934 Securities Exchange Act, and of Rule 10(b)5.

The complaint alleges that Spinosa signed seventeen "Lock Letters," falsely attesting to the fact that TD Bank held irrevocably restricted funds, in escrow, for the investors. It also accuses him of writing two  the letters stated that the bank was holding $22m and $20m in certain Rothstein law firm accounts, for ultimate payment to the investors, when, in truth and in fact, the accounts held less than one hundred dollars. Rothstein gave the victims worthless promissory notes, which purportedly secured their investments.

The prayer for relief requests:

(A) Monetary damages, as a civil money penalty, in an unspecified amount.
(B) Injunctive relief, regarding future violations of securities laws.
(C) That the Court retain jurisdiction over the case, and the defendant.

Media reports state that Miami criminal defense attorney Samuel Rabin, Jr. is representing Spinosa, who has issued a denial, stating  that his client was not aware of the fraud. Mr. Rabin is an experienced criminal lawyer who gets results; he represented Rama Vyasulu in the Rosemont Financial case, and was able to secure a favorable sentence for his client in that case, which involved a record federal seizure of funds.

The case has not been set for trial; we shall update our readers on all future developments as they occur.

*SEC vs. Spinosa, Case No.: 13-62066-civ-Marra (SD FL).

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