Jury Finds Jonathan Fraiman and Edward Laborio Guilty
The Securities and Exchange Commission (SEC) announced that on December 14, 2015, a jury in the federal court in Boston, Massachusetts, returned a guilty verdict against former Massachusetts resident Jonathan Fraiman in a criminal trial prosecuted by the Massachusetts U.S. Attorney. The jury found Fraiman guilty on one count of conspiracy and one count of mail fraud for his role in a boiler room scheme involving the sale of securities. The SEC previously charged Fraiman for the same conduct in a civil action. The scheme raised more than $4 million primarily from January 2008 through late August 2009 through the use of false promises and pressurized sales tactics with regard to the sale of securities in a group of related entities, most with the name “Envit,” that were owned and controlled by Edward Laborio, including a non-existent hedge fund. Fraiman will be sentenced on March 10, 2016.
On August 10, 2012, the SEC charged Laborio, Fraiman, Matthew Lazar, and the Envit entities in federal court for their roles in the Envit boiler room scheme. On August 7, 2014, Fraiman was criminally indicted by a federal grand jury, and was arrested on August 27, 2014. Laborio, who was also charged in the indictment, was a fugitive and was found deceased in Barcelona, Spain earlier this year.
On October 8, 2013, the court entered a judgment against Fraiman enjoining him from future violations of the antifraud provisions of the federal securities laws. On October 11, 2013, the SEC issued an Order barring Fraiman from any future association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, with the right to reapply after ten years. Fraiman consented to both the judgment and the SEC Order.
On November 27, 2013, the court in the entered a judgment against Lazar, enjoining him from future violations of the antifraud provision of the federal securities laws. On December 11, 2013, the SEC issued an Order barring Lazar from any future association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization, with the right to reapply after three years. Lazar consented to both the judgment and the SEC Order.
On November 18, 2014, the court entered a final judgment by default against Laborio and the Envit entities, enjoining them from future violations of the antifraud and other provisions of the federal securities laws. The final judgment ordered civil penalties of $4 million against Laborio and each of the Envit entities, and ordered Laborio and the entities to disgorge, jointly and severally, $5,006,590 in ill-gotten gains plus prejudgment interest. Laborio’s judgment also barred him from serving as an officer or director of a public company and from participating in any offering of penny stock.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.