Today, the Securities and Exchange Commission charged disbarred attorney Richard J. Rubin and licensed attorney Thomas J. Craft with fraud for their roles in a conspiracy involving legal opinion letters to fraudulently facilitate the sale of millions of microcap securities to retail investors.
The SEC’s complaint alleges that Rubin, who was disbarred in 1995, continued to fraudulently practice securities law from December 2015 to July 2018 by submitting at least 128 attorney opinion letters that allowed the investing public to purchase and sell microcap stock issuers’ securities. According to the complaint, Rubin fraudulently signed certain letters as an attorney and drafted other letters for Craft’s signature. The complaint alleges that Craft signed or permitted the use of his name and signature on at least 30 letters in which it was fraudulently claimed that he had performed substantive work to formulate the opinions expressed in those letters.
“Retail investors rely on gatekeepers such as attorneys to ensure that the issuers of the securities they purchase and sell comply with federal securities laws,” said Richard R. Best, Regional Director of the SEC’s New York office. “We will continue to pursue gatekeepers who abuse their positions and cause harm to the marketplace.”
In its complaint filed in the Eastern District of New York, the SEC accuses Rubin and Craft of violating the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934 and seeks injunctive relief, civil penalties, and penny stock prohibitions. Without admitting or denying the SEC’s allegations, Craft consented to a settlement that permanently enjoins him from committing similar violations and perpetually prohibits him from participating in any offering of a penny stock. The proposed judgment leaves the determination of any additional remedies, including civil penalties, to the court at the SEC’s request. The litigation between the SEC and Rubin will proceed in federal district court.
Today, the United States Attorney’s Office for the Southern District of New York filed criminal charges against Rubin and Craft.
Hane L. Kim and Michael Paley have performed the investigation for the SEC. Dugan Bliss and Ms. Kim will manage the pending litigation. Lara S. Mehraban is in charge of overseeing this matter. The SEC is grateful for the assistance of the United States Attorney’s Office for the Southern District of New York and the SEC’s Office of Inspector General.