SEC v. David L. Rothman, Case No. 12-cv-5412-BMS (E.D. Pa.). On September 24, 2012, the SEC announced fraud charges against David Rothman, a registered representative and minority owner of Rothman Securities, Inc., a broker-dealer registered with the SEC. For several years Rothman provided false account statements to his elderly and unsophisticated investors that overstated the value of their investment accounts. When some investors discovered that the account statements were false, Rothman tried to cover up his conduct by agreeing to pay those investors the fake investment returns he reported. When Rothman ran out of money to make the payments, he took money from another investor. Rothman also used misappropriated funds for his personal benefit.
The SEC charged Rothman with violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The SEC seeks injunctive relief, disgorgement together with prejudgment interest, and civil monetary penalties from Rothman. Criminal charges have also been filed against Rothman in a parallel criminal case.