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Univ. of Toledo College of Law

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Thursday, March 5, 2009

SEC Granted Summary Judgment Against Prime Bank Fraud Perpetrator

On February 26, 2009, the United States District Court granted the SEC's motion for summary judgment on its claims against Zahra Ghods ("Ghods"), and a company that she controls, RUSA Cap., Inc. ("Rusa Cap"). They were found to have defrauded investors in connection with Ghods's false promises to earn generous returns for investors in "prime bank" instruments. The Court ordered Ghods to pay disgorgement of $4,045,736, prejudgment interest of $810,121, and a $120,000 civil penalty. In addition, the Court ordered Rusa Cap to pay a civil penalty of $600,000. The Court also enjoined Ghods and Rusa Cap from further violations of the federal securities laws.

The Court found that Ghods and Rusa Cap violated the antifraud provision of the federal securities laws by actively and knowingly participating in certain fraudulent "prime bank" schemes perpetrated by Geoffrey Gish ("Gish"). Gish and the companies that he operated were the subject of a separate enforcement action in SEC v. Geoffrey Gish; Weston Rutledge Financial Services, Inc.; Zamindari Capital, LLC; Lexington International Fund, LLC; and Oxford Adams Capital, LLC, Case No. 1:06-CV-1171-CC (N.D. Ga.), in which a final judgment was entered on June 15, 2007.

http://lawprofessors.typepad.com/securities/2009/03/sec-granted-sum.html

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