2000-05-05 sec-litreleases litigation_release 65 KB 3,246 chars

SEC v. Assured International, Inc.; Sam E. Harris; Sharp Financial Corp.; Max Becker; and Tralana Lee, No. LR-16540, Central District of California (May 5, 2000) — Press Release

raw: Assured International, Inc., Sam E. Harris, Sharp Financial Corp., Max Becker and Tralana Lee

Assured International, Inc., Sam E. Harris, Sharp Financial Corp., Max Becker and Tralana Lee, No. LR-16540 (May 5, 2000)

Caption: SEC v. Assured International, Inc, et al.

Source JSON

summary

Sam E. Harris, Max Becker, Tralana Lee, Assured International, and Sharp Financial Corp. committed securities fraud by operating a boiler room that raised $1.27 million through false claims about latex product sales and concealed Harris’s ban by seven states and NASD, misappropriating over $373,000, leading to permanent injunctions, over $1.5 million in disgorgement, and maximum civil penalties.

paragraph

The SEC secured a summary judgment against Assured International, Inc., Sam E. Harris, Sharp Financial Corp., Max Becker, and Tralana Lee for violating Sections 17(a) and 10(b) and Rule 10b-5 of federal securities laws. The defendants raised $1,134,217.88 from investors between February 1998 and January 1999 by falsely claiming Assured manufactured latex products, while concealing Harris’s history of securities violations and his control over all funds; Harris, Becker, and Lee misappropriated $321,110.30, and Lee and Sharp later illegally raised an additional $136,500 in violation of court orders, with Lee misappropriating $52,733.19. The court ordered total disgorgement of $1,507,217.88 plus interest, imposed maximum civil penalties of $110,000 on Harris and Lee and $54,341.47 on Becker, and issued permanent injunctions against all defendants.

narrative

The SEC obtained a summary judgment against Assured International, Inc., its CEO Sam E. Harris, Sharp Financial Corp., and officers Max Becker and Tralana Lee for engaging in a widespread securities fraud scheme from February 1998 to January 1999. Operating a boiler room in Woodland Hills, California, the defendants raised $1,134,217.88 from investors nationwide by falsely representing that Assured manufactured and sold latex products, when in fact no such products were ever produced. They concealed critical facts: Harris was a repeat offender barred by seven states and censured and barred by the NASD, and he secretly controlled all investor funds despite claiming Becker and Lee were co-owners. Harris, Becker, and Lee misappropriated $321,110.30 of investor money for personal use, accounting for 28.3% of the total funds raised. After the SEC filed suit and obtained a temporary restraining order and preliminary injunction in January 1999, Lee and Sharp Financial Corp. illegally raised an additional $136,500 from investors between February and June 1999, failing to disclose the ongoing litigation and court orders, with Lee personally misappropriating $52,733.19 of those funds. The U.S. District Court permanently enjoined all defendants from future securities law violations, ordered disgorgement of $1,270,717.88 from Assured, $136,500 from Sharp, $249,783 from Harris, $54,341.47 from Becker, and $73,164.02 from Lee, plus prejudgment interest, totaling over $1.5 million. The court also imposed maximum third-tier civil penalties: $110,000 each on Harris and Lee, and $54,341.47 on Becker, reflecting the severity and persistence of their fraudulent conduct.

Enriched metadata

Scheme: boiler-room (100%)
Court: Central District of California
Disgorgement: $1,270,718
Civil penalty: $110,000
Entity: Assured International, Inc.

Classified boiler-room(confidence 100%). EDGAR detection: forms Form D· recall 50% / precision 4%. detection rule →

Extracted insights

Dollar amounts 9

$1.27M $1,270,717 $1M–$10M
$1.13M $1,134,217 $1M–$10M
$321K $321,110 $100K–$1M
$250K $249,783 $100K–$1M
$137K $136,500 $100K–$1M
$137K $136,500 $100K–$1M
$110K $110,000 $100K–$1M
$54K $54,341 $10K–$100K
$53K $52,733 $10K–$100K

Entities 1

scheme_term a boiler room out of woodland hills, southern california

Triples 24

The Court granted the Commission's motion for summary judgment against Defendants Assured International, Inc., Sam E. Harris, Sharp Financial Corp., Max Becker and Tralana Lee
The Court permanently enjoined Assured and Sharp from future violations of the antifraud provisions
The Court ordered Assured and Sharp to disgorge $1,270,717.88 and $136,500, respectively, in fraudulently obtained investor funds, plus prejudgment interest
The Court permanently enjoined Harris, Becker and Lee from future violations of the antifraud provisions
The Court ordered Harris to disgorge $249,783
The Court ordered Becker to disgorge $54,341.47
The Court ordered Lee to disgorge $73,164.02 in misappropriated investor funds, together with prejudgment interest
The Court imposed maximum third tier civil penalties of $110,000 against Harris and Lee
The Court imposed a civil penalty of $54,341.47 against Becker
Assured, Harris, Becker and Lee operated a boiler room out of Woodland Hills, Southern California
Assured, Harris, Becker and Lee raised $1,134,217.88 from investors nationwide from February 1998 through January 1999
Harris, Becker and Lee misappropriated $321,110.30 of investor monies for their own use
Harris claimed the title of Chief Executive Officer, among other titles, of Assured
Becker and Lee claimed the titles of President and Secretary, respectively
Assured, Harris, Becker and Lee represented that Assured was controlled by three officers, Defendants Becker and Lee, and a third officer
Assured, Harris, Becker and Lee failed to disclose that Harris, a repeat securities laws violator, controlled all investor funds
Seven states issued orders against Harris for securities laws violations
The National Association of Securities Dealers censured, fined, and barred Harris from association with any NASD member
Assured, Harris, Becker and Lee represented that investor money would be used to market and sell latex products
Assured never manufactured or distributed latex products
Harris, Becker and Lee misappropriated 28.3% of investor funds for their own personal use
Lee and Sharp continued the fraudulent scheme to raise $136,500 in violation of the Court orders to cease
Lee and Sharp failed to disclose the lawsuit, temporary restraining order and preliminary injunction issued by the Court
Lee misappropriated $52,733.19 of the additional monies raised

View original SEC litigation releasesec.gov

Extracted body text (3,246c)

Litigation Release No. 16540 / May 5, 2000 Securities and Exchange Commission v. Assured International, Inc., Sam E. Harris, Sharp Financial Corp., Max Becker and Tralana Lee, Civil Action No. 99-00530 FMC (BQRx) (C.D. Cal.) On May 1, 2000, the Honorable Florence-Marie Cooper, United States District Judge for the Central District of California, granted the Commission's motion for summary judgment against Defendants Assured International, Inc. ("Assured"), Sam E. Harris ("Harris"), Sharp Financial Corp. ("Sharp"), Max Becker ("Becker") and Tralana Lee ("Lee") for violating the antifraud provisions of the securities laws, Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Court permanently enjoined Assured and Sharp from future violations of the antifraud provisions and ordered them to disgorge $1,270,717.88 and $136,500, respectively, in fraudulently obtained investor funds, plus prejudgment interest. The Court also permanently enjoined Harris, Becker and Lee from future violations of the antifraud provisions, ordered Harris to disgorge $249,783, Becker to disgorge $54,341.47, and Lee to disgorge 73,164.02 in misappropriated investor funds, together with prejudgment interest, and imposed maximum third tier civil penalties of $110,000 against Harrris and Lee, and $54,341.47 against Becker. It was undisputed that Assured, Harris, Becker and Lee operated a boiler room out of Woodland Hills, Southern California and raised $1,134,217.88 from investors nationwide from February 1998 through January 1999. Harris, Becker and Lee misappropriated for their own use $321,110.30 of investor monies. Harris claimed the title of Chief Executive Officer, among other titles, of Assured; and Becker and Lee claimed the titles of President and Secretary, respectively. It was also undisputed that from February 1999 to June 1999, Lee and Sharp raised an additional $136,500 from investors from the offer and sale of Assured stock in violation of the Temporary Restraining Order and Preliminary Injunction issued by the Court. Assured, Harris, Becker and Lee represented to investors that Assured was controlled by three officers, Defendants Becker and Lee, and a third officer, and failed to disclose that Harris, a repeat securities laws violator, controlled all investor funds. Undisclosed to investors, seven states had issued orders against Harris for securities laws violations and the National Association of Securities Dealers censured, fined, and barred him from association with any NASD member. Assured, Harris, Becker and Lee also represented that investor money would be used to market and sell latex products, when, in fact, Assured never manufactured or distributed latex products and Harris, Becker and Lee misappropriated 28.3% of investor funds for their own personal use. Additionally, Lee and Sharp continued the fraudulent scheme to raise $136,500 in violation of the Court orders to cease, failed to disclose the lawsuit, temporary restraining order and preliminary injunction issued by the Court, and Lee misappropriated $52,733.19 of the additional monies raised. For more information, see Litigation Release No. 16037 (January 21, 1999).

OCR text (3,246c · plain-text · 99% conf)