Commission Obtains Judgments of Over $10 Million

The Commission secured judgments imposing over $10 million in monetary relief against a company and its CEO after four years of litigation. The case centered on a financial fraud in which the Defendants inflated the value of the firm’s largest assets and took other steps to create the appearance of profitability. SEC v. Premier Holding Corp., Civil Action No. 1:17-cv-09485 (S.D.N.Y.).

The complaint named as defendants the company, a provider of energy services, Randall Letcavage, its CEO and Joseph Greenblatt, a CPA who provided accounting services for the company. The complaint alleges that the firm and its CEO arranged a series of apparently important transactions designed to feign activity at the company to mislead investors. One key transaction involved the inflation of the value of its largest tangible asset, an unsecured promissory note with a face value of $5 million. Mr. Greenblatt is alleged to have assisted the scheme. The complaint alleged violations of each subsection of Securities Act Section 17(a) and Exchange Act Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5).

The Court entered a final judgment on January 20, 2021against the company and its CEO. The judgments imposed permanent injunctions based on each of the sections cited in the complaint, except the judgment as to the company did not include Exchange Act Section 13(b)(5). The judgments also require the two Defendants to pay, on a joint and several basis, disgorgement and prejudgment interest totaling $8,691,500 and a $1 million penalty as to each. Bars were imposed on Mr. Letcavage prohibiting him from being an officer or director or participating in a penny stock offering. See Lit. Rel. No. 25021 (Feb. 2, 2021).

Tagged with: ,