6.10.2009 The SEC charged Matthew D. Weitzman, a New York investment adviser, for orchestrating a scheme in which he allegedly stole more than $6 million in investor funds for his own personal use, in some instances victimizing clients who were terminally ill or mentally impaired. The SEC alleges that Weitzman sold securities in clients’ brokerage accounts and illegally funneled their money to a bank account that he secretly controlled. While Weitzman allegedly spent the money on a multimillion-dollar home, cars and other luxury items, he provided false account statements to clients, often showing inflated account balances and securities holdings. Weitzman also allegedly submitted to a broker-dealer phony letters from clients that purported to authorize the money transfers. When clients questioned Weitzman about the transfers they did not authorize, he allegedly misrepresented that he was withdrawing their funds to make legitimate investments.

Weitzman agreed to settle the SEC’s claims and, without admitting or denying the allegations, consented to the entry of a judgment that will grant the SEC the full relief that it seeks, but will defer the determination of the financial amounts of the settlement until a later date. The agreement to resolve the Commission’s action is subject to approval by the court.

Click http://www.sec.gov/litigation/litreleases/2009/lr21078.htm to access the SEC litigation release.