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SEC Charges Former Wall Street Executive and Three Others in Scheme to Defraud Savings Banks and Their Depositors in Dozens of Stock Offerings
New Jersey - The Securities and Exchange Commission filed a civil injunctive action in the United States District Court for the District of New Jersey charging four individuals with securities fraud for participating in a decade-long scheme to defraud savings banks and their depositors in connection with the banks' conversion from mutual to stock ownership. All four defendants have agreed to settle the Commission's charges.
The Commission's complaint alleges that Bert Fingerhut spearheaded a sophisticated scheme to circumvent federal and state banking regulations in order to make lucrative stock purchases in bank conversions. From January 1997 through January 2007, Bert Fingerhut's scheme generated a total of over $12 million in fraudulent profits from secondary market sales of bank stock illegally obtained in 65 public offerings.
The other three defendants were nominees for Bert Fingerhut who knowingly played active roles in implementing the scheme and profited from their efforts: Robert Danetz, a childhood friend of Bert Fingerhut; Bruce Fingerhut, Bert Fingerhut's nephew; and Stephen Danetz, Robert Danetz's brother. The complaint alleges that the defendants made numerous misrepresentations in stock subscription agreements and stock order forms to carry out their fraudulent scheme. The complaint also alleges that Robert Danetz and Bruce Fingerhut acted as undisclosed nominees and used phony identification cards and other documents in order to deceive the banks. All four defendants have agreed to settle the Commission's charges.
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