INVESTMENT ADVISER RECEIVES 21 YEAR PRISON SENTENCES FOR DEFRAUDING CLIENTS

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION 

Pennsylvania-Based Investment Adviser Charged in SEC and Criminal Actions Receives Prison Sentence

A Pennsylvania-based investment adviser who was charged with fraud in an SEC enforcement action and later by criminal authorities has received a prison sentence of more than 21 years.

Robert G. Bard of Warfordsburg, Pa., was sentenced on July 31 by Sylvia H. Rambo of the U.S. District Court for the Middle District of Pennsylvania. Bard had been found guilty by a jury and convicted of 21 counts of securities fraud, mail fraud, wire fraud, bank fraud, and making false statements for defrauding his investment advisory clients between December 2004 and August 2009. Judge Rambo sentenced Bard to 262 months imprisonment and ordered him to pay $4.2 million in restitution to 66 victims.

The criminal case, filed by the U.S. Attorney's Office for the Middle District of Pennsylvania on July 18, 2012, arose out of the same facts that were the subject of a civil injunctive action filed by the SEC on July 30, 2009. The Commission's complaint alleged that defendant Bard, an investment adviser, and his solely-owned company Vision Specialist Group LLC had violated the federal securities laws through fraudulent misrepresentations regarding client investments, account performance and advisory fees, and by Bard's creation of false client account statements, and forgery of client documents. On May 23, 2012, after granting summary judgment for the Commission, the U.S. District Court for the Middle District of Pennsylvania entered a final judgment against Bard and Vision Specialist Group finding both violated § 17(a) of the Securities Act of 1933, § 10(b) of the Exchange Act of 1934, and Rule 10b-5 thereunder, and §§ 206(1) and 206(2) of the Investment Advisers Act of 1940. In that judgment, the court also entered permanent injunctions for violations of those provisions, and held Bard and Vision Specialist Group jointly and severally liable for disgorgement, prejudgment interest, and civil penalties totaling $3,003,039.

BROKER SETTLES ALLEGED MISREPRESENTATION/FUNDS MISAPPROPRIATIONS CASE

FROM:  SECURITIES AND EXCHANGE COMMISSION 

Court Enters Final Judgment Against Broker in Settlement of Claims Arising from Fraudulent Misrepresentations and the Misappropriation of Funds

The Securities and Exchange Commission announced today that, pursuant to a settlement agreement, the Honorable Berle M. Schiller of the United States District Court for the Eastern District of Pennsylvania entered a final judgment on January 29, 2014 against defendant David L. Rothman in the Commission action, SEC v. David L. Rothman, Civil Action No. 2:12-cv-05412 (E.D. Pa.). The final judgment permanently enjoins Rothman from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. Rothman was ordered to pay disgorgement in the amount of $505,431. Rothman consented to the entry of the final judgment against him.

The SEC charged Rothman, a registered representative, who was the Vice President and minority owner of Rothman Securities, Inc., located in Southampton, Pennsylvania, which is a mutual fund retailer and municipal securities broker, with creating and issuing false account statements to certain elderly and unsophisticated investor/clients that materially overstated the value of their investment accounts. The Commission's Complaint further charged that when the investors discovered that Rothman had misrepresented the value of their investments, he engaged in a scheme to conceal his fraudulent conduct by agreeing to pay those investors the investment returns he reported on the false account statements. When Rothman could no longer afford to make those payments, he misappropriated funds from another elderly and unsophisticated investor/client and from two trust accounts for which he served as trustee. Rothman used a substantial portion of the misappropriated funds for his personal benefit.

The SEC's litigation was conducted by Nuriye C. Uygur and G. Jeffrey Boujoukos of the Philadelphia Regional Office. The SEC's investigation was conducted by enforcement staff Kingdon Kase and Jennifer F. Miller. The matter was referred to the enforcement staff by the Philadelphia Regional Office's Office of Compliance, Inspections and Examinations.