SEC Obtains Final Judgment on Consent Against Attorney Accused of Misrepresenting Investments and Misappropriating Investor Funds
Litigation Release No. 24027 / January 9, 2018
SEC v. David B. Kaplan, Esq., et al., No. 3:16-cv-00270 (D. Nevada)
The Securities and Exchange Commission announced today that, on January 8, 2018, the Honorable Miranda Du of the United States District Court for the District of Nevada entered a final judgment on consent against Defendants David B. Kaplan, Esq. and three entities he controls, Synchronized Organizational Solutions International Ltd. (SOSI), Synchronized Organizational Solutions LLC (SOS), and Manna International Enterprises Ltd. In its complaint, the SEC alleged that Kaplan, through the three entity defendants, orchestrated a fraudulent scheme that raised approximately $15.8 million from 26 investors in eight states. Without admitting or denying the allegations in the complaint, the defendants consented to the entry of an Order enjoining them from violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule l0b-5 thereunder, and further enjoining Kaplan from violating Section 15(a)(1) of the Exchange Act. The Court also ordered the defendants to pay disgorgement of $7,139,884.87, prejudgment interest of $680,157.61, and a civil penalty of $300,000. In addition, the Court entered judgments against Relief Defendants Lisa M. Kaplan, the Water-Walking Foundation Inc., and Manna Investments LLC, requiring them to pay disgorgement, plus prejudgment interest thereon, totaling $1,533,440.61. The final judgments order that funds subject to an asset freeze the Commission previously obtained be used to partially satisfy the financial obligations.
The SEC filed on May 19, 2016 its complaint alleging, among other things, that Kaplan repeatedly lied to prospective investors by stating that their funds would be invested in a low-risk, private off-shore trading program that would provide estimated monthly profits of 10 percent. The complaint alleges that Kaplan did not use investor funds as promised but instead misused and misappropriated investor funds, falsely represented to investors that their funds were invested, sent out false profit statements indicating that investors had earned returns, and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors. The complaint further alleges that Kaplan acted as an unregistered broker.
The SEC’s investigation was conducted by Raven A. Winters and Luz Aguilar, and supervised by Amy S. Cotter of the Chicago Regional Office. The litigation was led by Alyssa A. Qualls. For further information, see Litigation Release No. 23547 (May 27, 2016).