Friday, May 15, 2009
On May 14, 2009, the SEC filed an emergency civil injunctive action in the United States District Court for the District of New Jersey charging two investment firms and their two owner-managers with securities fraud. The Commission alleged that Paul G. Bultmeyer, Arthur J. Piacentini, Sherbourne Capital Management, Ltd. and Sherbourne Financial, Ltd. orchestrated an offering fraud in connection with the sale of "Prime Certificates of Participation." The court granted the Commission's application for emergency relief and, among other things, froze the assets of the defendants and appointed a receiver over Sherbourne Capital, Sherbourne Financial, and Relief Defendant Ameripay, LLC.
The Commission alleged that at least since 2004, Bultmeyer and Piacentini have operated the investment firms Sherbourne Capital Management, Ltd. and Sherbourne Financial, Ltd. Bultmeyer and Piacentini also operate Ameripay, LLC, a payroll services company based in Rochelle Park, NJ, that has numerous New Jersey municipalities and small businesses as clients. Bultmeyer is also Chief Executive Officer of Equitair, Ltd., a charter aviation company. The Complaint alleges that Sherbourne Financial, on its website, offered investors "Prime Certificates of Participation" and claimed that Sherbourne would use the proceeds to invest in private placement debt, high-grade corporate bonds, preferred stock, and government securities. Sherbourne claimed that its investments were safe and in some cases insured. The complaint also alleges that Sherbourne, however, did not invest in any such securities. Rather, Sherbourne transferred a net of over $900,000 to Ameripay, Bultmeyer, Piacentini, and Equitair.