Dan Rubin, Ceo of Rubin Investment Group, Inc. and 1-800-attorney, Inc., Pleads Guilty to Securities Fraud Charges
Roslynn R. Mauskopf, United States Attorney for the Eastern District of New York, announced that DAN RUBIN, chief executive officer of Rubin Investment Group, Inc. and 1-800-ATTORNEY, Inc., pleaded guilty to securities fraud and conspiracy charges. As part of his plea agreement with the government, RUBIN agreed to forfeit $2 million to the United States. The guilty plea was entered late yesterday afternoon before United States District Judge Eric N. Vitaliano at the U.S. Courthouse in Brooklyn, New York.
RUBIN’s guilty plea marks the final plea by the senior management of the Rubin Investment Group, an investment bank which at one time maintained offices in Los Angeles, California, Manhattan, and Lake Helen, Florida. Previously, DANIEL NOURANI, the former managing director of the Rubin Investment Group in Los Angeles, GLEN SANTHA, the firm’s former director of investment banking, and ANDREW SAKSA, the firm’s former director of mergers and acquisitions, entered guilty pleas to securities and conspiracy charges. When sentenced, each defendant faces a maximum sentence of 25 years’ imprisonment and a fine of up to $250,000, or twice the gain or loss from the offenses.
The charges leading to yesterday’s guilty plea stem from RUBIN and the Rubin Investment Group’s fraudulent acquisition and sale of stock of public companies between August 2002 and October 2003. As alleged in the indictment, in his capacity as chief executive officer of 1-800-ATTORNEY, a publicly held company that operated an attorney referral service in Lake Helen, Florida, RUBIN assembled a group of more than 20 of the company’s employees into a team of “cold callers,” provided them with sales scripts and alphabetical listings of hundreds of small-cap public companies, and then directed them to contact those companies. Using a variety of false and fraudulent representations, the cold callers induced several companies, or their largest shareholders, to sell the Rubin Investment Group large blocks of stock at significantly discounted prices. After acquiring stock from dozens of small-cap public companies, RUBIN promptly sold the stock in the open market at a substantial profit to himself, while simultaneously driving down the market price of the companies’ remaining stock. Frequently, RUBIN refused to pay the companies the agreed upon price for their stock.
At the guilty plea proceeding yesterday, RUBIN admitted that he instructed his staff to promise the small cap companies that he would recommend their stock to the Rubin Investment Group’s investors and that he would not sell their stock in the open market, although he had no intention of honoring that promise. RUBIN also admitted that in exchange for an option to purchase 280 million shares of Augrid Corporation’s stock, he agreed to provide the company with investment banking services. Instead, RUBIN exercised his option, sold the shares, and refused to pay for them.
“The defendants profited by victimizing small, publicly-held companies and the investing public,” stated United States Attorney Mauskopf. “They will now be held to account for their crimes.” Ms. Mauskopf expressed her grateful appreciation to the Federal Bureau of Investigation, New York Field Office, for its assistance in the criminal case, and to the United States Securities and Exchange Commission, which is pursuing separate civil proceedings against RUBIN and his co-defendants.
The criminal case is being prosecuted by Assistant U.S. Attorneys Gurbir Grewal, John Nathanson, and Kathleen Nandan.
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