SECURITY COMPANY ALLEGEDLY SOLD FAKE SECURITIES

The following is an excerpt from the SEC website: “On October 7, 2011, United States District Judge John G. Koeltl entered an order, consistent with a stipulated agreement between the Commission and Defendants, preliminarily enjoining Murdoch Security & Investigations, Inc. (“Murdoch”) and its two principal officers, Robert Goldstein and William Vassell from continuing an allegedly illegal, unregistered offering and sale of securities that the Commission alleges raised more than $1 million from noteholders, who were promised 22% annual interest on their investments. Judge Koeltl’s order also preliminarily enjoined Defendants Murdoch and Goldstein from further violations of certain anti-fraud provisions of the federal securities laws and froze certain of Defendants’ assets pending final disposition of the case. The Commission’s complaint, filed in the U.S. District Court for the Southern District of New York, alleges that Defendants, beginning in approximately October 2010, offered and sold notes to investors by placing advertisements in the Wall Street Journal and other financial press. The Commission further alleges that Murdoch, through Goldstein, misrepresented material facts to investors about the security company, including boasts of highly lucrative overseas operations when, in fact, Murdoch lacked any international business whatsoever. According to the Commission’s complaint, Murdoch told investors that capital was needed to finance acquisitions of additional security companies that would enhance Murdoch’s overall revenues and fund 22% interest payments to noteholders. In reality, the Commission alleges, money from new investors has been used primarily to fund interest payments to earlier investors and to pay the salaries of Defendants Goldstein and Vassell. The Commission’s complaint charges each Defendant with violations of Sections 5(a) and 5(c) of the Securities Act of 1933, and Defendants Murdoch and Goldstein with violations of Section 17(a) of the Securities Act, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission is seeking permanent injunctions against the defendants, and to have them return their allegedly ill-gotten gains with prejudgment interest, and pay civil monetary penalties. The Commission acknowledges the assistance of the New York District Attorney’s Office in connection with this matter.”