This case was last updated from PACER on 08/31/2021 at 07:51:28 (UTC).

U.S. Securities and Exchange Commission v. Kleyman

Case Summary

On August 30, 2021, the United States Securities and Exchange Commission (“SEC”), represented by Ariella O. Guardi, Charles J Kerstetter and Craig R Baune, attorneys at the SEC’s Chicago regional office, filed a civil enforcement action against Howard S. Kleyman (“Kleyman'' or “Defendant”), seeking injunctive relief, disgorgement of all ill-gotten gains with prejudgment interest and civil penalties for the alleged violation of various securities laws. This case was filed in U.S. District Court in the District of Minnesota with Judge Wilhelmina M. Wright and Judge Katherine M. Menendez presiding.

 

In its complaint, the SEC alleged that, “Kleyman knew or was reckless in not knowing that investors were relying on Kleyman, an attorney, to keep their funds safe and to disburse funds only upon successful completion of the transactions. Instead, Kleyman blindly disbursed the funds, without conducting any inquiry into whether the investors had received their promised instruments or funding.”

 

The SEC further alleged that, “Kleyman collected $12,499.12 in fees for the nine transactions for which he served as paymaster. These fees were paid from the defrauded investors’ funds.”

 

The SEC further alleged that, “Despite the serial failure of these prime bank investments, complaints from investors, and the lack of any evidence that these transactions had been or could be completed successfully, Kleyman continued his involvement in prime bank schemes. In fact, even after he stopped acting as a paymaster, Kleyman participated in prime bank transactions in other ways.”

 

The SEC also alleged that “Despite the serial failure of these prime bank investments, complaints from investors, and the lack of any evidence that these transactions had been or could be completed successfully, Kleyman continued his involvement in prime bank schemes. In fact, even after he stopped acting as a paymaster, Kleyman participated in prime bank transactions in other ways.”

 

There are two claims for relief laid down by the SEC. The first claim deals with alleged violation of Section 10(b) of the Exchange Act, and Exchange Act Rule 10b-5(a) and (c) [17 C.F.R 240.10b-5(a) and (c)]. The second claim is for the alleged violation of Section 17(a)(1) and (3) of the Securities Act [15 U.S.C. § 77q(a)(1), (3)].

 

In its prayer for relief the SEC has requested the Court permanently restrain and enjoin the Defendant with disgorgement of all ill-gotten gains and pre-judgment interest, along with the payment of civil monetary penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)], or any other relief as the Court deems appropriate.

 

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Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    0:21-CV-01943

  • Filing Date:

    08/30/2021

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Finance - Security/Commodity/Exchange

Judge Details

Presiding Judge

Wilhelmina M. Wright

Referral Judge

Katherine M. Menendez

 

Party Details

Plaintiff

U.S. Securities and Exchange Commission

Defendant

Howard S Kleyman

Attorney/Law Firm Details

Plaintiff Attorneys

Ariella O. Guardi

Attorney at US Securities and Exchange Commission

175 W. Jackson Blvd., Suite 900

Chicago, IL 60604

Charles J Kerstetter

Attorney at United States Securities and Exchange CO

175 West Jackson, Suite 1450

Chicago, IL 60604

Craig R Baune

Attorney at United States Attorney's Office

300 S 4Th St. Ste 600

Minneapolis, MN 55415

 

Court Documents

2 #2

Exhibit(s) Proposed Order

2 #1

Exhibit(s) Consent of Howard S. Kleyman

#2

(#2) MOTION for Entry of Judgment filed by U.S. Securities and Exchange Commission. (Attachments: #1 Exhibit(s) Consent of Howard S. Kleyman, #2 Exhibit(s) Proposed Order)(Guardi, Ariella) (Entered: 08/30/2021)

1 #1

Civil Cover Sheet

#1

(#1) COMPLAINT against Howard S Kleyman filed by U.S. Securities and Exchange Commission. No summons requested. (Attachments: #1 Civil Cover Sheet) (Guardi, Ariella) (Entered: 08/30/2021)

 

Docket Entries

  • 08/30/2021
  • Docket(#4) (Text-Only): Notice re: Non-Admitted AttorneyWe have received documents listing Jonathan A. Epstein as counsel of record. If he or she wishes to be listed as an attorney of record in this case, he or she must be admitted to the bar of the U.S. District Court of Minnesota in accordance with #Local Rule 83.5 (a), (b) and (c) or temporarily admitted pro hac vice in accordance with #Local Rule 83.5 (d) or (e).For more admissions information and forms, please see the Attorney Forms Section of the courts website at #www.mnd.uscourts.gov/forms/all-forms#. (CLK) (Entered: 08/30/2021)

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  • 08/30/2021
  • Docket(#3) TEXT ONLY ENTRY: CLERK'S NOTICE OF INITIAL CASE ASSIGNMENT. Case assigned to Judge Wilhelmina M. Wright per Civil (3rd, 4th - Antitrust, Securities) list, referred to Magistrate Judge Katherine M. Menendez. Please use case number 21-cv-1943 WMW/KMM. (CLK) (Entered: 08/30/2021)

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  • 08/30/2021
  • View Court Documents
  • Docket(#2) MOTION for Entry of Judgment filed by U.S. Securities and Exchange Commission. (Attachments: #1 Exhibit(s) Consent of Howard S. Kleyman, #2 Exhibit(s) Proposed Order)(Guardi, Ariella) (Entered: 08/30/2021)

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  • 08/30/2021
  • View Court Documents
  • Docket(#1) COMPLAINT against Howard S Kleyman filed by U.S. Securities and Exchange Commission. No summons requested. (Attachments: #1 Civil Cover Sheet) (Guardi, Ariella) (Entered: 08/30/2021)

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