SEC v. Bernard Daniel Braver, No. 1:08-Cr-220, Southern District of New York (Jan. 21, 2010) — Complaint

r:: ~~~.(-.<=-=~~. 
~•• :..' ., "". C.-' --, Ic; 'c~ A "P'7f''MiI
Counsel of Record:--~L-p "'-"''-':0 ~ ~~ d (j !Jl 
Leslie Kazon 
Attorney for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
3 World Financial Center, Suite 400 
New York, NY 10281-1022 
(212) 336-0107 (Kazon) 
[email protected] 
SECURITIES AND EXCHANGE COMMISSION, 
.Plaintiff, 
against~ 
10Civ._( ) 
.  COMPLAINT 
BERNARD DANIEL BRAVER, 
Defendant. 
--------'-------------,---_
.
.. 
Plaintiff Securities and Exchange Coinmission for its complaint against Bernard Daniel 
Braver alleges as follows: 
SUMMARY 
1. This action arises out ofBraver's fraudulent activities as a salesman for 
Rabinovich 
& Associates, LP, an unregistered investment company and broker-dealer 
(sometimes referred to hereafter as the "Fund" 
or the "firm") that operated out ofa storefront 
boiler room in Brooklyn, New York. From at least November 2003 through November 2007, the 
Fund's principals, Alex Rabinovich and Joseph Lovaglio,and Braver and other salesmen, raised 
at least $2,767,811 from at least 
169 investors nationwide, including senior citizens and retirees, 

through the sale of limited partnership interests in the Fund and, in a few instances, other 
securities. Braver raised at least $157,000 
ofthat. 
2. Rabinovich, Lovaglio, Braver, and the Fund's other salesmen solicited and 
obtained investments through a variety 
of false and misleading statements about the Fund's 
performance and track record, the firm's purported Wall Street.location, the background 
ofAlex 
Rabinovich, and the firm's purported status as a registered and insured broker-dealer. These 
fraudulent statements were made in phone conversations and meetings with prospective 
investors, and via the firm's website, Fund promotional materials, salesmen's business cards, and 
account statements sent to investors. 
3. The limited partnership interests in Rabinovich 
& Associates offered and sold by 
Braver were securities within the meaning ofSection 2(1) ofthe Securities Act of 1933 
("Securities Act"), 
15 U.s.c. § 77b(I),. and Section 3(a)(1O) ofthe Securities Exchange Act of 
1934 ("Exchange Act"), 15 U.S.c. § 78c(a)(10). 
4. 
In addition to fraudulently inducing investments in the Fund, Brayer also operated 
as an unregistered broker-dealer and offered and sold securities in an unregistered offering. 
5. Through this conduct, detailed below, Braver violated Sections 5(a), 5(c) and 
17(a) 
ofthe Securities Act, 15 U.S.C. §§ 77e(a), 77e(c) and 77q(a),Sections 10(b) and 15(a) of 
the Exchange Act, 15 U.S.c. §§ 78j(b) and 780(a), and Rule 10b-5 thereunder, 17 C.F.R. § 
240.10b-5 
6. By this action, the Commission seeks: (a) permanent injunctive relief; (b) 
disgorgement and prejudgment interest; (c) civil penalties; and (d) such further relief as the Court 
may deem appropriate. 
2 

JURISDICTION AND VENUE
 
7. The Commission brings this action pursuant to authority conferred by Section 
20(b) 
ofthe Securities Act, 15 U.S.c. § 77t(b) and Section 21(d) ofthe Exchange Act, 15 U.S.C. 
§ 78u(d). This Court has jurisdiction over this action pursuant to Section 22(a)ofthe Securities 
Act, and 15 U.S.C. § 77v(a), Sections 21(d), 21(e) and 27 ofthe Exchange Act, 15 U.S.C. §§ 
78u(d), 77u(e) and 78aa. 
8. Venue lies in this district pursuant to Section 22(a) of the Securities Act, 15 
U.S.c. § 77v(a), and Section 27 ofthe Exchange Act, 15 U.S.C. § 78aa. Certain ofthe 
.  transactions, acts, practices and courses ofbusiness constituting the violations alleged herein 
. occurred within the Southern District 
ofNew York. 
9. Defendant, directly or indirectly, made use ofthe means or instrumentalities of 
transportation or communication in, or the instrumentalities of, interstate commerce, or ofthe 
mails, in connection with the transactions, acts, practices, and courses 
ofbusiness a1leged in this 
complaint. 
DEFENDANT 
10. Bernard Daniel Braver, alk/a Daniel Bernard Braver, age 30, resides in 
Brooklyn, New York, and was a salesman at Rabinovich 
& Associates from October 2006 to 
November 2007. Before he joined Rabinovich 
& Associates, Braver had worked as a trainee at a 
registered broker-dealer and obtained his Series 7 and 
63 licenses. 
3
 

RELATED PERSONS
 
11. Rabinovich & Associates, LP was an unregistered entity located in Brooklyn, 
New York. 
It was never registered in any capacity with the Commission, the Financial Industry 
Regulatory Authority, Inc. ("FINRA"), 
or the New York StoCk Exchange (''NYSE''). On 
November 26, 2007, the Commission filed an emergency action against Rabinovich & 
Associates, Alex Rabinovich and Lovaglio, SEC v.Rabinovich & Associates, L.P., et aI., 07 CV 
10547 (GEL) (S.D.N.Y.), and obtained an asset freeze and other emergency.relief. See SEC 
Litigation Release No. 20372 (November 
27,2007), 
http://www.sec.gov/litigation/litreleases/2007/lr20372.htm. Shortly thereafter, the firm ceased 
doing business. 
12. Alex Rabinovich was the general partner 
ofRabinovich&, Associates and 
controlled its operations. 
13. 
Joseph Lovaglio was the managing director and head ofsales for Rabinovich & 
Associates. 
FACTS 
Rabinovich & Associates 
14. Rabinovich 
& Associates held itself out as an "independent investment company" 
and a broker-dealer "whose affiliates offer[
edT a broad array of financial products and services," 
with an office on Wall Street. According to the Rabinovich 
& Associates limited partnership 
agreement, the Fund was "organized to acquire for investment the securities 
... ofany 
recognized stock exchange company. . 
.to realize the value ofsuch Securities by managing the 
4 

same for the mutUal benefit ofthe [general partner and the investors]." 
15. 
In fact, the fimi. was a boiler room operating out of an unmarked storefront in the 
Gravesend/Sheepshead Bay section 
ofBrooklyn. The main room in this storefront had five 
desks, with a telephone and a U.S. time zone map at each desk. Hundreds 
of lead cards with 
names and contact infomi.ation were strewn 
on the desks, along with scripts for use by the 
salesmen when calling prospective investors and a "do-not-call" list. A large bulletin board 
along one wall 
ofthe room listed approximately ten reasons for a person to invest with 
Rabinovich 
& Associates, including "recession proof," "50/50 profit sharing" and "quarterly 
dividends." The bulletin board also stated the number 
of"points" for various numbers of"leads" 
(~, "1 lead = 1 point", "2 leads = 5 points"). 
16. Among the Fund's main selling points were the purported experience 
of Alex 
Rabinovich and the Fund's purported track record. The firm's website and promotional materials 
sent to prospective investors recounted the firm's purported "experience and success with 
institutional clients" and "successful relationships maintained with multi-million dollar clients," 
and stated that the Fund had achieved a 123.90% return in 2004, an 84.20% return in 2005, and a 
54.70%retum in 2006. Similarly exaggerated returns were reported on account statements sent 
to investors. 
17. These performance claims were false. Contrary to the representations in the 
website, promotional materials, and account statements, the Fund lost money in every quarter 
of 
its existence. Moreover, there were no institutional investors in the Fund and the firm never had 
any multi-million dollar clients. 
5 

18. The website, promotional materials, account statements, and salesmen's business 
cards also stated, falsely, that the finn was located on Wall Street, and account statements 
provided 
to investors falsely represented that the finn was a member ofthe NASD, the NYSE, 
and the Securities Investor Protection Corporation 
("SWC"). 
19. In addition, although the Fund bore Rabinovich's name, and via the website and 
other representations, touted his purported securities industry experience, neither the website nor 
any other offering or promotional materials disclosed that in July 2004, Rabinovich had been 
barred by the National Association 
of Securities Dealers (''NASD''), the predecessor to FINRA, 
from associating with any NASD-member broker-dealer, and investors were not otherwise. 
infonned 
of that fact. 
Braver's Role 
in the Fund's Fraud 
20. Braver joined the finn as a salesman in October, 2006, and worked there until the 
Commission filed its complaint in SEC 
v. Rabinovich & Associates, L.P., et al. in late 
November, 2007. 
21. Braver solicited investments in the Fund through cold-calls, follow-up calls to 
investors 
he had previously induced to invest in the Fund, and meetings with investors and 
prospective investors that he and Lovaglio conducted on fundraising trips they took to Tennessee, 
Massachusetts and Vennont. In his solicitations, Braver misrepresented the Fund's track record 
and performance and the location 
of its offices, and touted Rabinovich's purported trading 
acumen while failing to disclose Rabinovich's disciplinary history. For example: 
• Braver falsely represented to prospective investors that the Fund never had a 
losing quarter and that the Fund was able to achieve positive returns 
in both bull 
6 

and bear markets because ofRabinovich's short-selling strategies. 
•	 Braver referred prospective investors to the Fund's website, which.contained false 
performance figures and extolled Rabinovich's experience, but failed to disclose 
Rabinovich's disciplinary history. 
•	 Braver provided Fund investors with documents, including account statements, 
that contained false performance figures for the Fund. Each month, after account 
statements reporting false returns were sent to investors, Braver called the . 
investors he had solicited to discuss 
theirpurported returns. After these calls, 
some 
ifnot all ofthe investors continued to reinvest their purported profits in the 
Fund, and some 
ofthem invested additional monies.· 
•	 Braver provided several investors with his business card, which set forth a Wall 
Street address for Rabinovich 
& Associates, and sent letters to investors on 
stationery that also bore a Wall Street address. 
In fact, the firm's purported Wall 
Street office was only a commercial mail-drop. 
22. Braver either knew, or was reckless 
innot knowing, that the representations he 
made about the Fund's purported returns, claimed investment strategy, and Wall Street offices 
were false. Braver was aware that Rabinovich had been the subject 
ofdisciplinary proceedings, 
and knew that Rabinovich had forfeited his license to sell securities several years before Braver 
joined the firm, but did not disclose these 
faCts to prospective investors and investors 
notwithstanding Rabinovich's key role in the management 
ofthe firm. 
23.	 Investors solicited by Braver invested at  least $157,000 in the Fund. 
7
 

24. Braver received approximately $49,800 in salary and commissions in connection 
with his fraudulent offer and sale 
ofinterests inthe Fund. 
FIRST CLAIM FOR RELIEF 
Violations of Section 17(a) ofthe Securities Act, 15 U.S.C. § 77q(a),
 
Section 10(b) 
ofthe Exchange Act, 15 U.S.C. § 78j(b),
 
and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5
 
25. The Commission repeats and realleges the allegations contained in paragraphs 1 
through 
24 by reference as iffully set forth herein. 
26. Braver, directly and indirectly, knowingly 
or recklessly, by the use ofthe means or 
instruments oftransportation or communication in, and the means or instrumentalities of, 
interstate commerce, 
or by the use ofthe mails, in the offer or sale, and in connection with the 
purchase 
or sale, ofsecurities: (a) employed devices, schemes or artifices to defraud; (b) obtained 
money 
or property by means of, or otherwise made untrue statements ofmaterial fact, or omitted 
to state material facts necessary to make 
the statements made, in light ofthe circumstances under 
which they were made, not misleading; and (c) engaged 
in transactions, acts, practices and 
courses 
ofbusiness which operated or would operate as a fraud or deceit upon purchasers of 
securities or other persons. 
27. By reason 
ofthe acts, omissions, practices, and courses ofbusiness set forthin 
this complaint, Braver violated Section 17(a) ofthe Securities Act, 15 U.S.c. § 77q(a), Section 
10(b) 
of the Exchange Act, 15 U.S.c. § 78j(b), and Rule lOb-5 thereunder, 17 C.F.R. § 240;10b­
5. 
8
 

SECOND CLAIM FOR RELIEF
 
Violations of Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) and 77e(c) 
28. The Commission realleges and incorporates paragraphs 1 through 24 by reference 
as 
if fully set forth herein. 
29. No registration statement was ever filed with the Commission or in effect with 
respect to the interests 
inthe Fund offered and sold by Braver and no exemption from registration 
was available. 
30. Braver, directly or indirectly: (a) made use 
ofthe means or instruments of 
transportation or communication in interstate commerce or ofthe mails to sell securities through 
the use or medium 
of a prospectus or otherwise; or carried securities or caused such securities to 
be carried through the mails or in interstate commerce, by means or instruments of 
transportation,forthepurpose ofsaleorfordeliveryaftersale; and(b)madeuse ofthemeans or 
instruments oftransportation or communication in interstate commerce or ofthe mails to offer to 
sell or offer to buy, through the use or medium of any prospectus or otherwise, securities without 
a registration statement having been filed or being in effect with the Commission as to such 
securities. 
31. By 
reasonofthe foregoing, Braver violated Sections Sea) and S(c) ofthe 
Securities Act, 
15 U.S.C. §§ 77e(a) and 77e(c). 
THIRD CLAIM FOR RELIEF
 
Violations of Section 15(a) of the Exchange Act, 15 U.S.C. §§ 780(a)
 
32. The Commission realleges and incorporates paragraphs 1 through 24 by reference 
as 
iffullysetforth herein. 
9 

33. Braver was engaged in soliciting purchases of, and effecting transactions in, 
securities issued 
by Rabinovich & Associates, and received compensation based on those 
transactions. Neither Rabinovich 
& Associates, Rabinovich, nor Lovaglio was registered as a 
broker 
or dealer, and Braver was not an associated person of a registered broker or dealer at the 
time he solicited and effected transactions in securities 
ofthe Fund. 
34. 
By engaging in the conduct described above, directly or indirectly, Braver, by use 
ofthe mails and the means or instrumentalities ofinterstate commerce, while acting as a broker 
and while engagedinthe business 
ofeffectingtransactions in securities for the accounts ofothers 
otherwise than through a national securities exchange, effected transactions in, or induced 
or 
attempted to induce the purchase or sale of securities (otherthan an exempted security or 
commercial paper, banker's acceptances, or cOmniercial bills) without registering as a broker 
or 
dealer in accordance with Section 15(b) ofthe Exchange Act, 15 U.S.C. § 780(b). 
35. By engaging in the conduct described above, Braver violated Section 15(a) 
ofthe 
Exchange Act, 15 U.S.c. § 780(a). 
PRAYER FOR RELIEF 
WHEREFORE, Plaintiff Commission respectfully requests that the 
Court 
1. Enter a final judgment: 
(A) Permanently restraining and enjoining Braver, his officers, agents, 
servants, employees, attorneys in-fact, and all persons in active concert or participation with them 
who receive actual notice 
ofthe injunction by personal service or otherwise, and each ofthem, 
from violating Sections 5(a), S(c) and 17(a) of the Securities Act, 15 U.S.C. §§ 77e(a), 77e(c) 
10
 

and 77q(a), and Sections 10(b) and 15(a) of the Exchange Act, 15 U.S.c. §§ 78j(b) and 78o(a), 
andRulelOb-5 thereunder, 17 C.F.R. § 240.10b-5; 
(B) .	 Directing Braver to disgorge his ill-gotten gains from the violative conduct 
alleged in this complaint, and to pay prejudgment interest thereon; 
(C)	 Directing Braver to pay civil money penalties pursuant 
to Section 20(d) of 
theSecuritiesAct; 15U.S.C.§77t(d),Section21(d) oftheExchangeAct, 15U.S.C.§78u(d); 
and 
2.	 Such other and further relief as the Court deems appropriate. 
Dated:	 
JanuaryLL, 2010 
New York, New Yark 
Respectfully submitted, 
.~~ 
. orge S. Canellos· . 
ATTORNEY FORPLAINTIFF 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
3 World Financial Center, Suite 400 
New York, New Y
orkl 0281..., 1022 
(GC-8092) 
OfCounsel:
 
Andrew M. Calamari .
 
Leslie Kazon
 
James 
E. Burt IV (not admitted in New York)
 
Kristine Zaleskas
 
11 

r:: ~~~.(-.<=- =~~. 
~•• :..' ., "". C.-' --, Ic; 'c~ A "P'7f''MiI

Counsel of Record:--~L-p "'-"''-':0 ~ ~~ d (j !Jl 

Leslie Kazon 
Attorney for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
3 World Financial Center, Suite 400 
New York, NY 10281-1022 
(212) 336-0107 (Kazon) 
[email protected] 

SECURITIES AND EXCHANGE COMMISSION, 

.Plaintiff, 

against~ 

10Civ._( ) 

. COMPLAINT 

BERNARD DANIEL BRAVER, 
Defendant. 

--------'-------------,---_
... 

Plaintiff Securities and Exchange Coinmission for its complaint against Bernard Daniel 

Braver alleges as follows: 

SUMMARY 

1. This action arises out ofBraver's fraudulent activities as a salesman for 

Rabinovich & Associates, LP, an unregistered investment company and broker-dealer 

(sometimes referred to hereafter as the "Fund" or the "firm") that operated out of a storefront 

boiler room in Brooklyn, New York. From at least November 2003 through November 2007, the 

Fund's principals, Alex Rabinovich and Joseph Lovaglio,and Braver and other salesmen, raised 

at least $2,767,811 from at least 169 investors nationwide, including senior citizens and retirees, 



through the sale of limited partnership interests in the Fund and, in a few instances, other 

securities. Braver raised at least $157,000 of that. 

2. Rabinovich, Lovaglio, Braver, and the Fund's other salesmen solicited and 

obtained investments through a variety of false and misleading statements about the Fund's 

performance and track record, the firm's purported Wall Street .location, the background ofAlex 

Rabinovich, and the firm's purported status as a registered and insured broker-dealer. These 

fraudulent statements were made in phone conversations and meetings with prospective 

investors, and via the firm's website, Fund promotional materials, salesmen's business cards, and 

account statements sent to investors. 

3. The limited partnership interests in Rabinovich & Associates offered and sold by 

Braver were securities within the meaning of Section 2(1) of the Securities Act of 1933 

("Securities Act"), 15 U.s.c. § 77b(I),. and Section 3(a)(1O) of the Securities Exchange Act of 

1934 ("Exchange Act"), 15 U.S.c. § 78c(a)(10). 

4. In addition to fraudulently inducing investments in the Fund, Brayer also operated 

as an unregistered broker-dealer and offered and sold securities in an unregistered offering. 

5. Through this conduct, detailed below, Braver violated Sections 5(a), 5(c) and 

17(a) ofthe Securities Act, 15 U.S.C. §§ 77e(a), 77e(c) and 77q(a),Sections 10(b) and 15(a) of 

the Exchange Act, 15 U.S.c. §§ 78j(b) and 780(a), and Rule 10b-5 thereunder, 17 C.F.R. § 

240.10b-5 

6. By this action, the Commission seeks: (a) permanent injunctive relief; (b) 

disgorgement and prejudgment interest; (c) civil penalties; and (d) such further relief as the Court 

may deem appropriate. 

2 



JURISDICTION AND VENUE
 

7. The Commission brings this action pursuant to authority conferred by Section 

20(b) ofthe Securities Act, 15 U.S.c. § 77t(b) and Section 21(d) ofthe Exchange Act, 15 U.S.C. 

§ 78u(d). This Court has jurisdiction over this action pursuant to Section 22(a)of the Securities 

Act, and 15 U.S.C. § 77v(a), Sections 21(d), 21(e) and 27 of the Exchange Act, 15 U.S.C. §§ 

78u(d), 77u(e) and 78aa. 

8. Venue lies in this district pursuant to Section 22(a) of the Securities Act, 15 

U.S.c. § 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. § 78aa. Certain ofthe 

. transactions, acts, practices and courses of business constituting the violations alleged herein 

. occurred within the Southern District ofNew York. 

9. Defendant, directly or indirectly, made use of the means or instrumentalities of 

transportation or communication in, or the instrumentalities of, interstate commerce, or of the 

mails, in connection with the transactions, acts, practices, and courses ofbusiness a1leged in this 

complaint. 

DEFENDANT 

10. Bernard Daniel Braver, alk/a Daniel Bernard Braver, age 30, resides in 

Brooklyn, New York, and was a salesman at Rabinovich & Associates from October 2006 to 

November 2007. Before he joined Rabinovich & Associates, Braver had worked as a trainee at a 

registered broker-dealer and obtained his Series 7 and 63 licenses. 

3
 



RELATED PERSONS
 

11. Rabinovich & Associates, LP was an unregistered entity located in Brooklyn, 

New York. It was never registered in any capacity with the Commission, the Financial Industry 

Regulatory Authority, Inc. ("FINRA"), or the New York StoCk Exchange (''NYSE''). On 

November 26, 2007, the Commission filed an emergency action against Rabinovich & 

Associates, Alex Rabinovich and Lovaglio, SEC v.Rabinovich & Associates, L.P., et aI., 07 CV 

10547 (GEL) (S.D.N.Y.), and obtained an asset freeze and other emergency.relief. See SEC 

Litigation Release No. 20372 (November 27,2007), 

http://www.sec.gov/litigation/litreleases/2007/lr20372.htm. Shortly thereafter, the firm ceased 

doing business. 

12. Alex Rabinovich was the general partner ofRabinovich&, Associates and 

controlled its operations. 

13. Joseph Lovaglio was the managing director and head of sales for Rabinovich & 

Associates. 

FACTS 

Rabinovich & Associates 

14. Rabinovich & Associates held itself out as an "independent investment company" 

and a broker-dealer "whose affiliates offer[edT a broad array of financial products and services," 

with an office on Wall Street. According to the Rabinovich & Associates limited partnership 

agreement, the Fund was "organized to acquire for investment the securities ... of any 

recognized stock exchange company. . .to realize the value of such Securities by managing the 

4 



same for the mutUal benefit of the [general partner and the investors]." 

15. In fact, the fimi. was a boiler room operating out of an unmarked storefront in the 

Gravesend/Sheepshead Bay section ofBrooklyn. The main room in this storefront had five 

desks, with a telephone and a U.S. time zone map at each desk. Hundreds of lead cards with 

names and contact infomi.ation were strewn on the desks, along with scripts for use by the 

salesmen when calling prospective investors and a "do-not-call" list. A large bulletin board 

along one wall of the room listed approximately ten reasons for a person to invest with 

Rabinovich & Associates, including "recession proof," "50/50 profit sharing" and "quarterly 

dividends." The bulletin board also stated the number of "points" for various numbers of "leads" 

(~, "1 lead = 1 point", "2 leads = 5 points"). 

16. Among the Fund's main selling points were the purported experience of Alex 

Rabinovich and the Fund's purported track record. The firm's website and promotional materials 

sent to prospective investors recounted the firm's purported "experience and success with 

institutional clients" and "successful relationships maintained with multi-million dollar clients," 

and stated that the Fund had achieved a 123.90% return in 2004, an 84.20% return in 2005, and a 

54.70%retum in 2006. Similarly exaggerated returns were reported on account statements sent 

to investors. 

17. These performance claims were false. Contrary to the representations in the 

website, promotional materials, and account statements, the Fund lost money in every quarter of 

its existence. Moreover, there were no institutional investors in the Fund and the firm never had 

any multi-million dollar clients. 

5 



18. The website, promotional materials, account statements, and salesmen's business 

cards also stated, falsely, that the finn was located on Wall Street, and account statements 

provided to investors falsely represented that the finn was a member of the NASD, the NYSE, 

and the Securities Investor Protection Corporation ("SWC"). 

19. In addition, although the Fund bore Rabinovich's name, and via the website and 

other representations, touted his purported securities industry experience, neither the website nor 

any other offering or promotional materials disclosed that in July 2004, Rabinovich had been 

barred by the National Association of Securities Dealers (''NASD''), the predecessor to FINRA, 

from associating with any NASD-member broker-dealer, and investors were not otherwise. 

infonned of that fact. 

Braver's Role in the Fund's Fraud 

20. Braver joined the finn as a salesman in October, 2006, and worked there until the 

Commission filed its complaint in SEC v. Rabinovich & Associates, L.P., et al. in late 

November, 2007. 

21. Braver solicited investments in the Fund through cold-calls, follow-up calls to 

investors he had previously induced to invest in the Fund, and meetings with investors and 

prospective investors that he and Lovaglio conducted on fundraising trips they took to Tennessee, 

Massachusetts and Vennont. In his solicitations, Braver misrepresented the Fund's track record 

and performance and the location of its offices, and touted Rabinovich's purported trading 

acumen while failing to disclose Rabinovich's disciplinary history. For example: 

• Braver falsely represented to prospective investors that the Fund never had a 

losing quarter and that the Fund was able to achieve positive returns in both bull 

6 



and bear markets because ofRabinovich's short-selling strategies. 

•	 Braver referred prospective investors to the Fund's website, which.contained false 

performance figures and extolled Rabinovich's experience, but failed to disclose 

Rabinovich's disciplinary history. 

•	 Braver provided Fund investors with documents, including account statements, 

that contained false performance figures for the Fund. Each month, after account 

statements reporting false returns were sent to investors, Braver called the . 

investors he had solicited to discuss theirpurported returns. After these calls, 

some if not all of the investors continued to reinvest their purported profits in the 

Fund, and some of them invested additional monies.· 

•	 Braver provided several investors with his business card, which set forth a Wall 

Street address for Rabinovich & Associates, and sent letters to investors on 

stationery that also bore a Wall Street address. In fact, the firm's purported Wall 

Street office was only a commercial mail-drop. 

22. Braver either knew, or was reckless innot knowing, that the representations he 

made about the Fund's purported returns, claimed investment strategy, and Wall Street offices 

were false. Braver was aware that Rabinovich had been the subject ofdisciplinary proceedings, 

and knew that Rabinovich had forfeited his license to sell securities several years before Braver 

joined the firm, but did not disclose these faCts to prospective investors and investors 

notwithstanding Rabinovich's key role in the management of the firm. 

23.	 Investors solicited by Braver invested at least $157,000 in the Fund. 

7
 



24. Braver received approximately $49,800 in salary and commissions in connection 

with his fraudulent offer and sale of interests in the Fund. 

FIRST CLAIM FOR RELIEF 

Violations of Section 17(a) ofthe Securities Act, 15 U.S.C. § 77q(a),
 
Section 10(b) ofthe Exchange Act, 15 U.S.C. § 78j(b),
 

and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5
 

25. The Commission repeats and realleges the allegations contained in paragraphs 1 

through 24 by reference as if fully set forth herein. 

26. Braver, directly and indirectly, knowingly or recklessly, by the use of the means or 

instruments of transportation or communication in, and the means or instrumentalities of, 

interstate commerce, or by the use ofthe mails, in the offer or sale, and in connection with the 

purchase or sale, of securities: (a) employed devices, schemes or artifices to defraud; (b) obtained 

money or property by means of, or otherwise made untrue statements ofmaterial fact, or omitted 

to state material facts necessary to make the statements made, in light of the circumstances under 

which they were made, not misleading; and (c) engaged in transactions, acts, practices and 

courses ofbusiness which operated or would operate as a fraud or deceit upon purchasers of 

securities or other persons. 

27. By reason of the acts, omissions, practices, and courses of business set forthin 

this complaint, Braver violated Section 17(a) of the Securities Act, 15 U.S.c. § 77q(a), Section 

10(b) of the Exchange Act, 15 U.S.c. § 78j(b), and Rule lOb-5 thereunder, 17 C.F.R. § 240;10b­

5. 

8
 



SECOND CLAIM FOR RELIEF
 

Violations of Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) and 77e(c) 

28. The Commission realleges and incorporates paragraphs 1 through 24 by reference 

as if fully set forth herein. 

29. No registration statement was ever filed with the Commission or in effect with 

respect to the interests inthe Fund offered and sold by Braver and no exemption from registration 

was available. 

30. Braver, directly or indirectly: (a) made use of the means or instruments of 

transportation or communication in interstate commerce or of the mails to sell securities through 

the use or medium of a prospectus or otherwise; or carried securities or caused such securities to 

be carried through the mails or in interstate commerce, by means or instruments of 

transportation, for the purpose of sale or for delivery after sale; and (b) made use of the means or 

instruments of transportation or communication in interstate commerce or of the mails to offer to 

sell or offer to buy, through the use or medium of any prospectus or otherwise, securities without 

a registration statement having been filed or being in effect with the Commission as to such 

securities. 

31. By reasonofthe foregoing, Braver violated Sections Sea) and S(c) of the 

Securities Act, 15 U.S.C. §§ 77e(a) and 77e(c). 

THIRD CLAIM FOR RELIEF
 

Violations of Section 15(a) of the Exchange Act, 15 U.S.C. §§ 780(a)
 

32. The Commission realleges and incorporates paragraphs 1 through 24 by reference 

as if fully set forth herein. 

9 



33. Braver was engaged in soliciting purchases of, and effecting transactions in, 

securities issued by Rabinovich & Associates, and received compensation based on those 

transactions. Neither Rabinovich & Associates, Rabinovich, nor Lovaglio was registered as a 

broker or dealer, and Braver was not an associated person of a registered broker or dealer at the 

time he solicited and effected transactions in securities of the Fund. 

34. By engaging in the conduct described above, directly or indirectly, Braver, by use 

ofthe mails and the means or instrumentalities ofinterstate commerce, while acting as a broker 

and while engaged in the business of effecting transactions in securities for the accounts ofothers 

otherwise than through a national securities exchange, effected transactions in, or induced or 

attempted to induce the purchase or sale of securities (otherthan an exempted security or 

commercial paper, banker's acceptances, or cOmniercial bills) without registering as a broker or 

dealer in accordance with Section 15(b) ofthe Exchange Act, 15 U.S.C. § 780(b). 

35. By engaging in the conduct described above, Braver violated Section 15(a) ofthe 

Exchange Act, 15 U.S.c. § 780(a). 

PRAYER FOR RELIEF 

WHEREFORE, Plaintiff Commission respectfully requests that the Court 

1. Enter a final judgment: 

(A) Permanently restraining and enjoining Braver, his officers, agents, 

servants, employees, attorneys in-fact, and all persons in active concert or participation with them 

who receive actual notice of the injunction by personal service or otherwise, and each ofthem, 

from violating Sections 5(a), S(c) and 17(a) of the Securities Act, 15 U.S.C. §§ 77e(a), 77e(c) 

10
 



and 77q(a), and Sections 10(b) and 15(a) of the Exchange Act, 15 U.S.c. §§ 78j(b) and 78o(a), 

andRulelOb-5 thereunder, 17 C.F.R. § 240.10b-5; 

(B) .	 Directing Braver to disgorge his ill-gotten gains from the violative conduct 

alleged in this complaint, and to pay prejudgment interest thereon; 

(C)	 Directing Braver to pay civil money penalties pursuant to Section 20(d) of 

the SecuritiesAct; 15 U.S.C. § 77t(d), Section 21(d) of the Exchange Act, 15 U.S.C. § 78u(d); 

and 

2.	 Such other and further relief as the Court deems appropriate. 

Dated:	 JanuaryLL, 2010 
New York, New Yark 

Respectfully submitted, 

.~~ 
. orge S. Canellos· . 

ATTORNEY FORPLAINTIFF 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
3 World Financial Center, Suite 400 
New York, New Yorkl 0281..., 1022 
(GC-8092) 

Of Counsel:
 

Andrew M. Calamari .
 
Leslie Kazon
 
James E. Burt IV (not admitted in New York)
 
Kristine Zaleskas
 

11