sec-litreleases litigation_release 64 KB 2,082 chars

SEC v. Todd M. Eberhard; Park South Securities, LLC; Eberhard Investment Associates, Inc.; and Stone House Capital Partners LP, No. LR-17969, Southern District of New York — Press Release

raw: Todd M. Eberhard, et al.

Todd M. Eberhard, et al., No. LR-17969 (S.D.N.Y.)

Caption
SEC v. Todd M. Eberhard, et al.
Source JSON
summary

Todd M. Eberhard, along with his firms Park South Securities and Eberhard Investment Associates, and the affiliated hedge fund Stone House Capital Partners, committed securities fraud by looting customer accounts through forged statements and unauthorized transfers, leading to an emergency SEC action, asset freezes, receiver appointment, and pending litigation.

paragraph

The SEC charged Todd M. Eberhard, Park South Securities, Eberhard Investment Associates (an unregistered adviser), and Stone House Capital Partners with securities fraud for systematically looting customer brokerage accounts through forged account statements, unauthorized transfers between unrelated clients' accounts, and illegal wire transfers. Eberhard, a television investment personality, concealed massive losses and misrepresented account values as recently as the week before the filing, diverting millions in customer funds to Stone House and other entities. The court issued a temporary restraining order, froze all related assets, appointed a receiver for the firms, and ordered immediate accounting and expedited discovery; the litigation remains pending with cooperation from the U.S. Attorney’s Office.

narrative

The SEC filed an emergency civil action against Todd M. Eberhard, his registered broker-dealer Park South Securities, his unregistered investment adviser Eberhard Investment Associates, and the affiliated hedge fund Stone House Capital Partners for committing widespread securities fraud. Eberhard, a television investment personality, orchestrated a scheme to conceal substantial losses in customer accounts by issuing phony account statements and making material misrepresentations about account values, with fraudulent activity continuing as recently as the week before the complaint was filed. He misappropriated customer funds by moving assets between unrelated clients’ accounts without authorization and executing unauthorized wire transfers, effectively looting the accounts and channeling millions to Stone House, which the SEC designated as a relief defendant. In response, the U.S. District Court for the Southern District of New York issued a temporary restraining order, froze all assets traceable to the fraud—including those held by Stone House—and appointed a receiver to take control of Park South and EIA. The court also ordered an immediate verified accounting from all defendants and expedited discovery to uncover the full scope of the misconduct. The SEC acknowledged the cooperation of the U.S. Attorney’s Office for the Southern District of New York in the investigation. The litigation remains ongoing, with customers’ losses still being assessed and legal remedies being pursued.

Enriched metadata

Scheme
broker-dealer-fraud (95%)
Court
Southern District of New York
Entity
Todd M. Eberhard
Classified broker-dealer-fraud(confidence 95%). EDGAR detection: forms Form D· recall 29% / precision 9%. detection rule →
Statutes
15 U.S.C. § 78j(b)17 C.F.R. § 240.10b-515 U.S.C. § 77q(a)
Parties
Securities and Exchange CommissionTodd M. EberhardPark South Securities, LLCEberhard Investment Associates, Inc.Stone House Capital Partners LP
Keywords
park southeberhardcustomeraccountstodd eberhardstone houseinvestmentparksouthinvestment advisercustomer fundscustomer accountscustomer accounttoddcommission

Extracted insights

Entities 10
  • company eberhard investment associates inc.
  • company park south securities llc
  • company park south securities llc, eberhard investment associates inc.
  • person phony customer account statements
  • agency Securities and Exchange Commission
  • scheme_term securities fraud, looting of customer brokerage accounts
  • person todd m. eberhard
  • company todd m. eberhard, park south securities llc, eberhard investment associates inc.
  • court united states district court for the southern district of new york
  • person unregistered investment adviser
Triples 13
  • SEC filed action against Todd M. Eberhard, Park South Securities LLC, Eberhard Investment Associates Inc.
  • Todd M. Eberhard charged with securities fraud, looting of customer brokerage accounts
  • Todd M. Eberhard owns Park South Securities LLC, Eberhard Investment Associates Inc.
  • Park South Securities LLC is registered broker-dealer and registered investment adviser
  • Eberhard Investment Associates Inc. is unregistered investment adviser
  • Stone House Capital Partners LP received transfers of Park South customer funds at Eberhard's direction
  • Eberhard and his companies concealed substantial losses in customer accounts
  • Defendants issued phony customer account statements
  • Defendants misappropriated customer funds by moving assets between unrelated customer accounts
  • Defendants made unauthorized wire transfers out of customer accounts
  • United States District Court for the Southern District of New York entered temporary restraining order and asset freeze against Eberhard and entities
  • Court appointed receiver for Park South and EIA
  • Case filed in S.D.N.Y. Civ. 03 CV 813 (RJB)
View original SEC litigation releasesec.gov
Extracted body text (2,082c) 
SEC v. Eberhard, et al. (S.D.N.Y. Civ. 03 CV 813 (RJB)) The Commission announced today that it filed an emergency action this morning charging securities fraud, including looting of customer brokerage accounts, against broker and television investment personality Todd M. Eberhard and his brokerage and investment advisory firms, Park South Securities, LLC ("Park South"), a registered broker-dealer and registered investment adviser, and Eberhard Investment Associates, Inc. ("EIA"), an investment adviser that was not registered with the Commission. The complaint also names Stone House Capital Partners LP ("Stone House"), a Park South affiliated hedge fund, as a relief defendant that received transfers of Park South customer funds at Eberhard's direction. The complaint alleges that Eberhard and his companies systematically concealed substantial losses in customer accounts by, among other things, issuing phony customer account statements and making other material misrepresentations about the value of the accounts. The defendants also misappropriated customer funds by moving assets back and forth between the accounts of unrelated customers without knowledge or authority of the customers, and by making unauthorized wire transfers out of customer accounts - essentially looting the accounts. The fraud was ongoing: defendants continued to misrepresent the value of customer account balances as recently as last week. Upon the Commission's application, the United States District Court for the Southern District of New York today entered a temporary restraining order and an order freezing the assets of Eberhard and his entities as well as assets of Stone House that are traceable to Eberhard's customers. The Court also appointed a receiver for Park South and EIA and ordered an immediate verified accounting from all defendants and expedited discovery. The litigation is pending. The Commission would like to thank the United States Attorney's Office for the Southern District of New York for its assistance and cooperation in this matter. SEC Complaint in this matter
OCR text (2,082c · plain-text · 99% conf) 
SEC v. Eberhard, et al. (S.D.N.Y. Civ. 03 CV 813 (RJB)) The Commission announced today that it filed an emergency action this morning charging securities fraud, including looting of customer brokerage accounts, against broker and television investment personality Todd M. Eberhard and his brokerage and investment advisory firms, Park South Securities, LLC ("Park South"), a registered broker-dealer and registered investment adviser, and Eberhard Investment Associates, Inc. ("EIA"), an investment adviser that was not registered with the Commission. The complaint also names Stone House Capital Partners LP ("Stone House"), a Park South affiliated hedge fund, as a relief defendant that received transfers of Park South customer funds at Eberhard's direction. The complaint alleges that Eberhard and his companies systematically concealed substantial losses in customer accounts by, among other things, issuing phony customer account statements and making other material misrepresentations about the value of the accounts. The defendants also misappropriated customer funds by moving assets back and forth between the accounts of unrelated customers without knowledge or authority of the customers, and by making unauthorized wire transfers out of customer accounts - essentially looting the accounts. The fraud was ongoing: defendants continued to misrepresent the value of customer account balances as recently as last week. Upon the Commission's application, the United States District Court for the Southern District of New York today entered a temporary restraining order and an order freezing the assets of Eberhard and his entities as well as assets of Stone House that are traceable to Eberhard's customers. The Court also appointed a receiver for Park South and EIA and ordered an immediate verified accounting from all defendants and expedited discovery. The litigation is pending. The Commission would like to thank the United States Attorney's Office for the Southern District of New York for its assistance and cooperation in this matter. SEC Complaint in this matter