Associates LP ("Rabinovich & Associates"), Alex Rabinovich ("Rabinovich") and Joseph

Counsel of Record: 
Mark 
K. Schonfeld (MS-2798) 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
3 World Financial Center, Suite 
400 
New York, NY 10281-1022 
(212) 336-0145 (Paley) 
UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 
SECURITIES AND EXCHANGE COMMISSION, 
Plaintiff, 
against-COMPLAINT 
RABINOVICH 
& ASSOCIATES, LP, 
ALEX RABINOVICH AND 
JOSEPH LOVAGLIO, 
Defendants. 
Plaintiff Securities and Exchange Commission for its complaint against Rabinovich & 
Associates LP ("Rabinovich & Associates"), Alex Rabinovich ("Rabinovich") and Joseph 
Lovaglio ("Lovaglio") (collectively, "Defendants") alleges as follows: 
SUMMARY 
1. 
This action arises out of an ongoing, fraudulent securities offering by Alex 
Rabinovich, Rabinovich 
& Associates, LP, an unregistered investment company and broker- 
dealer managed by Rabinovich, and Joseph Lovaglio, a salesman and managing director at 
Rabinovich 
& Associates. Operating out of a storefront boiler room in Brooklyn, Defendants are 
: 
selling limited partnership interests in Rabinovich & Associates (sometimes referred to hereafter 

as the "Fund" or the "firm") and other securities to investors, including senior citizens and 
retirees. 
2. 
Defendants obtain investments in the Fund by cold-calling and have made, and are 
continuing 'to make, 
fraudulent statements to investors and prospective investors in the Fund, 
including: 
(1) false claims that the Fund has been extraordinarily profitable whereas the Fund's 
actual performance has been dismal; and 
(2) false representations that Rabinovich & Associates 
is a Wall Street firm and a member of the NASD, the New York Stock Exchange ("NYSE"), and 
the Securities Investor Protection Corporation ("SPC"). Defendants have also failed to disclose 
to investors that Rabinovich has been barred by the NASD from associating with any broker or 
dealer and that there is a pending action by the Financial Industry Regulatory Authority, Inc. 
("FINRA") seeking to bar Lovaglio from associating with any broker or dealer.' 
3. Defendants have raised at least $550,000 from at least twenty-three investors, and 
have lost most of that money, even while providing investors with quarterly account statements 
that reflect large gains and "dividends" in every period. Defendants are continuing to solicit 
investments in the Fund and the purchase of other securities and are continuing to lull existing 
Fund investors with false account statements. 
4. In addition to defrauding Fund investors and prospective investors, Defendants are 
unlawfully operating as unregistered broker-dealers and offering and selling securities in an 
unregistered offering; and defendant Rabinovich 
& Associates is unlawfully operating as an 
unregistered investment company. 
Effective July 30,2007, the NASD and NYSE member regulation, enforcement, and 
arbitration operations have been consolidated, creating 
FINRA. 
1 

5. 
Through ths conduct, and that detailed below, Defendants have violated Sections 
5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. 
$8 77e(a), 77e(c) 
and 77q(a), Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act"), 
15 U.S.C. 
$8 78j(b) and 78o(a), and Rule lob-5 thereunder, 17 C.F.R. 8 240.10b-5; Rabinovich 
has violated Section 206(4) of the Investment Advisers Act of 1940 ("Advisers Act"), 15 U.S.C. 
8 80b-6(4), and Rule 206(4)-8, 17 C.F.R. 5 275.206(4)-8; ~ova~lio has aided and abetted 
violations of Section 206(4) of the Advisers Act, 15 U.S.C. 
tj 80b-6(4), and Rule 206(4)-8, 17 
C.F.R. 
8 275.206(4)-8; and Rabinovich & Associates has violated Section 7(a) of the Investment 
Company Act of 1940 ("Investment Company Act"), 15 U.S.C. 
8 80a-7(a). 
6. Unless restrained and enjoined by the Court, Defendants will continue to engage 
in the transactions, acts, practices and courses of business alleged herein, and in transactions, 
acts, practices, and courses of business of a similar type and object. 
7. 
By this action, the Commission seeks: (a) permanent injunctive relief; (b) 
disgorgement and prejudgment interest; (c) civil penalties; (d) emergency and preliminary relief 
including (i) a temporary restraining order and preliminary injunction, (ii) asset freezes, and (iii) 
orders requiring Defendants to provide sworn accountings, permitting expedited discovery, and 
prohibiting the destruction of documents; and (e) such further relief as the Court may deem 
appropriate. 
JURISDICTION AND VENUE 
8. 
The Commission brings this action pursuant to authority conferred by Section 
20(b) of the Securities Act, 15 U.S.C. 
8 77t(b), Section 2 1(d) of the Exchange Act, 15 U.S.C. 6 
78u(d), Section 209(d) of the Advisers Act, 15 U.S.C. 5 80b-9(d), and Section 42(d) of the 
3 

5. 
Through this conduct, and that detailed below, Defendants have violated Sections 
5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. 
55 77e(a), 77e(c) 
and 77q(a), Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act"), 
15 U.S.C. 
$5 78j(b) and 78o(a), and Rule lob-5 thereunder, 17 C.F.R. 5 240.10b-5; Rabinovich 
has violated Section 206(4) of the Investment Advisers Act of 1940 ("Advisers Act"), 15 U.S.C. 
80b-6(4), and Rule 206(4)-8, 17 C.F.R. 
5 275.206(4)-8; Lovaglio has aided and abetted 
violations of Section 206(4) of the Advisers Act, 15 U.S.C. 
5 80b-6(4), and Rule 206(4)-8, 17 
C.F.R. 
5 275.206(4)-8; and Rabinovich & Associates has violated Section 7(a) of the Investment 
Company Act of 1940 ("Investment Company Act"), 15 U.S.C. 
5 80a-7(a). 
6. Unless restrained and enjoined by the Court, Defendants will continue to engage 
in the transactions, acts, practices and courses of business alleged herein, and 
in transactions, 
acts, practices, and courses of business of a similar type and object. 
7. 
By th~s action, the Commission seeks: (a) permanent injunctive relief; (b) 
disgorgement and prejudgment interest; (c) civil penalties; (d) emergency and preliminary relief 
including (i) a temporary restraining order and preliminary injunction, (ii) asset freezes, and (iii) 
orders requiring Defendants to provide sworn accountings, permitting expedited discovery, and 
prohibiting the destruction of documents; and (e) such fixther relief as the Court may deem 
appropriate. 
JURISDICTION 
8. 
The Commission brings this action pursuant to authority conferred by Section 
20(b) of the Securities Act, 15 U.S.C. 
5 77t(b), Section 21(d) of the Exchange Act, 15 U.S.C. tj 
78u(d), Section 209(d) of the Advisers Act, 15 U.S.C. 5 80b-9(d), and Section 42(d) of the 

Investment Company Act, 15 U.S.C. 5 80a-41(d). This Court has jurisdiction over this action 
pursuant to Section 22(a) of the Securities Act, 15 U.S.C. 
5 77v(a), Sections 21(d), 21(e) and 27 
of the Exchange Act, 15 U.S.C. 
55 78u(d), 77u(e) and 78aa, Section 2 14 of the Advisers Act, 15 
U.S.C. 
5 80b-14, and Section 44 of the Investment Company Act, 15 U.S.C. 5 80a-43. 
9. Venue lies in this district pursuant to Section 22(a) of the Securities Act, 15 
U.S.C. 
5 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. $78aa, Section 214 of the 
Advisers Act, 15 U.S.C. 
5 80b-14, and Section 44 of the Investment Company Act, 15 U.S.C. 5 
80a-43. Certain of the transactions, acts, practices and courses of business constituting the 
violations alleged herein occurred within the Southern District of New York. 
10. 
Defendants, directly or indirectly, singly or in concert, have made use of the 
means or instrumentalities of transportation or communication in, or the instrumentalities of, 
interstate commerce, or of the mails, in connection with the transactions, acts, practices, and 
courses of business alleged in this complaint. 
THEDEFENDANTS  
1 1. Rabinovich & Associates, LP is a limited partnership, purportedly organized in 
December 2002 and located at  14 Wall Street, New York, NY. Its offices are actually located in 
an unmarked 
storefront at 502 Gravesend Neck Road, Brooklyn, NY. It is not registered in any 
capacity with the Commission, and is not a member of the NASD, the NYSE or SIPC. 
According to its website, www.ra-lp.com, Rabinovich 
& Associates is an "independent 
investment company whose affiliates offer a broad array of financial products and services." 
In 
actuality, Rabinovich & Associates is an unregistered investment company and an unregistered 

broker-dealer operating a boiler room. 
12. Alex Rabinovich, age 29, resides in Brooklyn, New York. He is the general 
partner of Rabinovich 
& Associates and a self-described "private wealth manager." From 
August 2001 through April 2004, Rabinovich worked as a registered representative for, 
successively, Dupont Securities Group, Inc., Indianapolis Securities, Inc. and Salomon Grey 
Financial Corporation, each of which has been the subject of significant disciplinary action. 
In 
March 2004, he consented to a fine of $5,000 to resolve a customer complaint of unauthorized 
trading while at Dupont. In ~~1~2004, the NASD revoked his registration for failure to pay the 
- 
fine, and shortly thereafter, Rabinovich consented to a bar fiom association with any NASD 
member in 
any capacity on the basis of his failure to respond to an NASD request to provide 
testimony. 
In November 2004, the NASD found Rabinovich and Dupont jointly liable in a 
customer arbitration for approximately $165,000, based on claims of fi-aud, breach of contract 
and breach of fiduciary duty. 
13. Joseph Lova~lio, age 
25, resides in Brooklyn, New York. He is a managing 
director of Rabinovich 
& Associates and the head of its sales operation. Since 1998, he has 
worked for at least seven financial firms, at least three of which have been the subject of law 
enforcement action. Lovaglio is the subject of a pending FINRA proceeding based on his failure 
to provide 
FINRA with requested information and documents in connection with a customer 
allegation of fraud. 
' 

Rabinovich & Associates 
14. Rabinovich & Associates holds itself out as an "independent investment 
company" and a broker-dealer "whose affiliates offer a broad array of financial products and 
services," and whose principal offices are located at  14 Wall Street. According to the 
Rabinovich 
& Associates limited partnership agreement, the Fund "is organized to acquire for 
investment the securities 
. . .of any recognized stock exchange company . . . to realize the value 
of such Securities by managing the same for the mutual benefit of the [General Partner and the 
Limited Partners]." The firm's website indicates that the Fund is divided into two funds, one of 
which follows a "moderate growth" strategy and the other of which follows an "aggressive 
growth" strategy. 
15. The limited partnership agreement confers broad powers on the general partner, 
who is Alex Rabinovich. The agreement also provides that the general partner shall receive "no 
fees, wages or payment" for managing the Fund, "except for his fifty 
(50%) percent profit 
realized on any transactions on behalf of the partnership[,]" and provides that the partnership 
shall bear all organizational and operating expenses. 
16. 
The firm's website expands only slightly on the Fund's vague investment strategy. 
It states, for example, that Rabinovich's goal is "to yield returns to individual investors that 
institutions are accustomed to[,]" and continues with such bland pronouncements as: 
The firm's model for investing complements the average investor's needs. 
The model works when capital is pooled together and distributed  
respectively. It  limits risk and increases returns. 
. . . When many investors  
devote funds together, capital accumulates and all are more likely to turn a  
profit because of the large buying power. 
. . .  

17. 
Among the Fund's main selling points are the firm's claimed experience and the 
Fund's purported track record. The website recounts the firm's supposed "experience and 
success with institutional clients." The site Wer represents, "Due to the fund's exceptional 
performance and the successful relationships maintained with multi-million dollar clients, the 
firm also agreed to reward average investors. 
.. . Therefore, at the end of 2003, the fund closed 
its doors to institutions and welcomed the average investor." 
18. Upon information and belief, there have never have been institutional investors in 
the Fund and the firm has never had any multi-million dollar clients. 
19. 
In marketing the Fund, Defendants extol the Fund's purported extraorbary track 
record. The Fund's website indicates that, from inception, the firm has aclveved a 127.3% return 
in its "moderate growth 
fund" and a 442.9% return in its "aggressive growth fund." The website 
Wher claims, for example, that the firm achieved a 123.90% return in 2004, an 84.20% return in 
2005 and a 54.70% return in 2006. Moreover, according to the website, in the firm's worst 
quarter ever 
-purportedly the only quarter in the three-year period when the quarterly return was 
less than 11.80% 
-it achieved a 6.10% return. The website conveys that these purported returns 
are the result of the firm's "large buying poweryy and Rabinovich's trading acumen. According to 
the website, Rabinovich is "the man who is able to swim with the sharks." 
20. 
The Fund's website also highlights the Fund's supposed flexible redemption 
policy and lack of management fees, as well as the purported character of Rabinovich and 
Lovaglio. For example, the website contains a number of "testimonials" that extol the Fund's 
flexibility and high returns and praise Rabinovich and Lovaglio personally: 
"The thing 
I appreciate most is the personable service and the returns are  
phenomenal." James Bull from 
NV  
7 

"R&A L.P. has guided us correctly in the market and is delightful team to 
work with. Joseph Lovaglio is very easy to communicate with and a 
pleasure to do business with." Thomas Yancey from 
AZ 
"The only company where the firm gets compensated on performance and 
also pick[s] mostly winners providing percentage gains in any market 
conditions, where else can you do that." Dean Henderson from CA 
"I am pleased with the consistency of performance that the fund produces. 
Alex Rabinovich is honest, 
fiank, and very easy to deal with. He is one of 
the most trustworthy people in the industry that 
I have ever encountered. 
He will tell you how it is! 
!" Howard Hinck from NJ 
Defendants Are opera tin^ a Boiler Room 
21. 
The firm's primary activity is the sale of limited partnership interests in the Fund 
and other securities, including shares in a purported private placement by Datawind Net Access 
Corp. 
In addition, Rabinovich engages in day-trading on behalf of the Fund. 
22. Lovaglio heads the sales operation, which consists of himself and a number of 
other cold callers. Lovaglio personally makes many of the cold calls and also frequently calls 
existing Fund investors to solicit additional investments. The Fund's salesmen are paid a 
commission based on a percentage of the amount they raise. 
23. The firm targets senior citizens and unsophisticated investors. At least eleven of 
the Fund's investors are sixty years old or older, including three who are in their seventies and 
three who are in their eighties. At least three investors used their 
IRA money to invest in the 
Fund, with the firm's assistance and encouragement. Fund investors are located across the 
country. 
24. By means of fraudulent representations and hgh pressure sales tactics, including 
those described below, Defendants have raised at least 
$550,000 from at least twenty-three 
8 

investors. 
Defendants Have Made and Continue to ~ake Materially False  
and Misleading Statements to Fund Investors and Prospective Investors  
25. 
To induce potential investors to invest in the Fund and to induce existing 
investors to make additional investments and to refer other prospective investors, Defendants 
have made numerous misrepresentations to Fund investors and prospective investors about the 
firm, the background of the firm's principals, the Fund's track record, and the performance of 
individual investors' accounts. 
26. 
Defendants represent on quarterly account statements mailed to investors that 
Rabinovich 
& Associates is a member of the NASD, the NYSE, and SIPC. Tlvs representation 
is false. The firm is not a member of the NASD or the NYSE and its customer's accounts are not 
insured by SIPC. 
27. 
Defendants also tout the firm's supposed Wall Street location. On account 
statements, letters to investors, the firm's website, Rabinovich's and Lovaglio's business cards, 
and the limited partnership agreements mailed to some investors, the firm has repeatedly 
represented that its office or its principal office is at 14 Wall Street. Investors have been 
instructed to, and do, send funds and signed partnerslvp agreements to the Wall Street address in 
the belief that the firm's offices are located there. In fact, the offices are in an unmarked 
Brooklyn storefront and the Wall Street address is nothing more than a commercial mail drop 
used by Defendants to create the false impression that the firm is prosperous and professional. 
28. 
Defendants fail to disclose to investors or potential investors that Rabinovich has 
been barred by the NASD from association with any broker or dealer, even as the firm's website 

-which does not mention Rabinovich's bar -touts his purported experience and includes a 
testimonial to his honesty. On information and belief, Defendants also fail to disclose to 
investors and prospective investors the pending FINRA proceeding against Lovaglio, which is 
not disclosed on the website. 
29. Defendants also misrepresent the Fund's track record to prospective and existing 
Fund investors. For example, the firm website states that the Fund achieved a 123.90% return in 
2004, an 84.20% return in 2005 and a 54.70% return 
in 2006. The same or similar performance 
claims are also contained in promotional materials sent to prospective investors. 
In one such 
document, Defendants touted a cumulative return of 538.01% fiom the Fund's inception in 
December 2002. 
30. Quarterly account statements sent to Fund investors also represent that the Fund is 
earning substantial returns. The account statements set forth the amount of each investor's 
"dividend," and reflect Fund performance of as much as 18.6% for a quarter and 62.278% for a 
year. 
3 1. These performance claims are false. Since it began trading, the Fund has incurred 
losses on its tradmg every quarter. 
32. 
Defendants have made other misrepresentations about the benefits and risks of 
investing in the Fund. For example, correspondence dated December 2006 sent to one Fund 
investor states, in part: 
Benefits of Rabinovich 
& Associates LP Fund Program 
-Asset diversification and the possible risk reduction associated with adding low to 
slightly negative correlation to the equity investments in your portfolio 
-A good alternative to low yielding bonds and deposits 
-Professional account management fiom a well-capitalized firm  
10  

-Liquidity of assets -redemptions may take place on a quarterly basis, with no fee or 
penalty. 
In fact, in light of its consistent losses, the Fund is not a good alternative to "low yielding bonds 
and deposits" and, upon information and belief, the firm is not well-capitalized. 
33. 
In addition to the misrepresentations outlined above, Lovaglio has made other 
false or misleading statements to investors and prospective investors in oral sales pitches. For 
example, Lovaglio told one investor that he was heavily invested in the Fund himself, when in 
fact he is not. Lovaglio also minimized the risks of investing in the Fund when speaking with 
investors and potential investors, by, for example, comparing an investment in the Fund to 
"money in the bank." 
In selling interests in the Fund, Lovaglio also engaged in other high 
pressure sales tactics. 
' 
Defendants Are Continuing to Defraud Fund Investors and to Solicit Additional 
Investments 
34. 
Defendants are continuing to defiaud Fund investors and continuing to solicit 
additional investments 
in the Fund. The most recent account statements sent to Fund investors, 
for the quarter ended September 2007, repeat the false representation that the firm is a member of 
the NASD, NASD, and SPC. These statements also contain positive performance claims for the 
quarter that are inconsistent with the trading losses in the Fund's brokerage account for that 
period. 
In addition, at least as recently as October and November 2007, Fund investors have 
been solicited to make additional investments in the Fund. 

FIRST CLAIM FOR RELIEF  
[AllDefendants]  
Violations of Section 17(a) of the Securities Act, 15 U.S.C. 
5 77q(a),  
seetion lo@) of the Exchange Act, 15 U.S.C. 
5 78j@),  
and Rule lob-5 thereunder, 17 C.F.R. 
6 240.10b-5  
35. 
The Commission repeats and realleges the allegations contained in paragraphs 1 
through 
34 by reference as if fully set forth herein. 
36. 
The limited partnership interests in Rabinovich 
& Associates offered and sold by 
Defendants are securities within the meaning of Section 2(1) of the Securities Act, 15 U.S.C. 
5 
77b(l), and Section 3(a)(10) of the Exchange Act, 15 U.S.C. 5 78c(a)(10). 
37. The misrepresentations and omissions described above are material. 
38. 
Defendants, directly and indirectly, singly and in concert, knowingly or recklessly, 
by the use of the means or instnunents of transportation or communication in, and the means or 
instnunentalities of, interstate commerce, or by the use of the mails, in the offer or sale, and in 
connection with the purchase or sale, of securities, have: (a) employed devices, schemes or 
artifices to defiaud; (b) obtained money or property by means of, or otherwise made untrue 
statements of material fact, or omitted to state material facts necessary to make the statements, in 
light of the circumstances under whch they were made, not misleading; and (c) engaged in 
transactions, acts, practices and courses of business which operated or would operate as a fiaud 
or deceit upon purchasers of securities or other persons. 
39. 
By reason of the foregoing, Defendants have violated, are violating, and unless 
restrained and enjoined, will continue to violate, Section 17(a) of the Securities Act, 15 U.S.C. 
5 
77q(a), Section 10(b) of the Exchange Act, 15U.S.C. 5 78j(b), and Rule lob-5 thereunder, 17 

C.F.R. 8 240.10b-5. 
SECOND CLAIM FOR RELIEF 
[Rabinovich and Lovaglio] 
Violations of Section 206(4) of the Advisers Act, 15 U.S.C. 
5 80b-6(4) 
and Rule 206(4)-8,17 C.F.R. 
6275.206(4)-8 
40. The Commission realleges and incorporates paragraphs 1 through 39 by reference 
as if fully set forth herein. 
41. Rabinovich is an investment adviser as defined by Section 202(a)(l1) of the 
Advisers Act, 15 U.S.C. 880b-2(a)(11). 
42. The Fund is a pooled investment vehicle as defined by Advisers Act Rule 206(4)- 
8(b), 17 C.F.R. 
$ 275.206(4)-8(b). 
43. 
Rabinovich, singly and in concert with others, directly and indirectly, by use of the 
mails or any means or instrumentality of interstate commerce, engaged in acts, practices, or 
courses of business which are fraudulent, deceptive, or manipulative. Specifically, Rabinovich 
(a) made untrue statements of a material fact, or omitted to state a material fact necessary to 
make the statements made, in the light of the circumstances under which they were made, not 
misleading, to investors or prospective investors in the Fund; andlor 
(b) engaged in acts, 
practices, or course of business that were fraudulent, deceptive, or manipulative with respect to 
investors or prospective investors in the Fund. 
44. By reason of the foregoing, Rabinovich has violated, is violating, and unless 
enjoined, will continue to violate, Section 206(4) of the Advisers Act, 15 U.S.C. 
$ 80'0-6(4) and 
Rule 206(4)-8 thereunder, 17 C.F.R. $275.206(4)-8. 
i 

45. Lovaglio substantially assisted Rabinovich's violations of Section 206(4) of the 
Advisers Act, 15 U.S.C. 80b-6(4) and Rule 206(4)-8 thereunder, 17 C.F.R. 275.206(4)-8, and 
did so knowingly or recklessly. 
46. 
By reason of the foregoing, Lovaglio has aided and abetted, is aiding and abetting, 
and unless enjoined, will continue to aid and abet, Rabinovich's violations of Section 206(4) of 
the Advisers Act, 15 U.S.C. 
5 80b-6(4) and Rule 206(4)-8 thereunder, 17 C.F.R. 5 275.206(4)-8. 
THIRD CLAIM FOR RELIEF  
JAll Defendants1  
Violations 
of Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. 6677e(a) and 77e(c) 
47. The Commission realleges and incorporates paragraphs 1 through 46 by reference 
as if hlly set forth herein. 
48. 
No registration statement was ever filed with the Commission or in effect with 
respect to the interests in the Fund offered and sold by Defendants, and no exemption from 
registration is available. 
49. 
Defendants, directly or indirectly: (a) made use of the means or instruments of 
transportation or communication in interstate commerce or of the mails to sell securities through 
the use or medium of a prospectus or otherwise; or canied securities or caused such securities to 
be carried through the mails or in interstate commerce, by means or instruments of 
transportation, for the purpose of sale or for delivery after sale; and 
(b) made use of the means or 
instruments of transportation or communication in interstate commerce or of the mails to offer to 
sell or offer to buy, through the use or medium of any prospectus or otherwise, securities without 
a registration statement having been filed or being in effect with the Commission as to such 

securities. 
50. 
By reason of the foregoing, Defendants have violated, are violating, and unless 
enjoined, will continue to violate Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. 
55 
77e(a) and 77e(c). 
FOURTH CLAIM FOR RELIEF 
[All Defendants] 
Violations of Section 15(a) of the Exchange Act, 15 U.S.C. 
46 78o(a) 
51. The Commission realleges and incorporates paragraphs 1 through 50 by reference 
as if fully set forth herein. 
52. 
Defendants were engaged and continue to engage in soliciting purchases of, and 
effecting transactions in, securities issued by defendant Rabinovich 
& Associates and other 
securities, and received compensation based on those transactions. Neither Rabinovich 
& 
Associates, Rabinovich, nor Lovaglio was registered as a broker or dealer, and Rabinovich, 
Lovaglio and the other salespeople were not associated persons of a registered broker or dealer. 
53. 
By engaging in the conduct described above, directly or indirectly, Defendants, by 
use of the mails and the means or instrumentalities of interstate commerce, while acting as 
brokers and while engaged in the business of effecting transactions in securities for the accounts 
of others otherwise than through a national securities exchange, effected transactions in, or 
induced or attempted to induce the purchase or sale of securities (other than an exempted security 
or commercial paper, banker's acceptances, or commercial bills) without registering as a broker 
or dealer in accordance with Section 
15(b) of the Exchange Act, 15 U.S.C. 5 78o(b). 
54. 
By reason of the foregoing, Defendants have violated, are violating, and unless 

restrained and enjoined will continue to violate, Section 15(a) of the Exchange Act, 15 U.S.C:§ 
FIFTH CLAIM FOR RELIEF 
[Rabinovich
& Associates] 
Violations of Section 7(a) of the Investment Company Act, 
15 U.S.C. 6 80a-7(a) 
55. 
The Commission realleges and incorporates paragraphs 1 through 54 by reference 
as if hlly set forth herein. 
56. Rabinovich 
& Associates has issued securities in a public offering and is and has 
been or has held itself out as being engaged primarily, and proposes and has proposed to engage 
primarily, in the business of investing, reinvesting, or trading in securities. 
57. 
Rabinovich 
& Associates therefore was and is an investment company under 
Section 3(a)(l) of the Investment Company Act, 15 U.S.C. 
5 80a-3(a)(l). No exemption or 
exclusion is available. Accordingly, Rabinovich 
& Associates was and is required to register 
with the Commission under Section 7(a) of the Investment Company Act, 15 U.S.C. 
5 80a-7(a). 
It is not so registered and, by acting as an investment company without being registered, has 
violated, is violating, and unless enjoined will continue to violate, Section 7(a) of the Investment 
Company Act. 
58. 
By reason of the foregoing, Rabinovich 
& Associates have violated, are violating, 
and unless restrained and enjoined will continue to violate, Section 7(a) of the Investment 
Company Act, 15 U.S.C. 
tj 80a-7(a). [15 U.S.C. 5 80a-7(a)] 

PRAYER FOR RELIEF 
WHEREFORE, Plaintiff Commission respectfully requests that the Court: 
1. 
Enter a final judgment: ' 
(A) 
Permanently restraining and enjoining the defendants, their officers, 
agents, servants, employees, attorneys in-fact, and all persons in active concert or participation 
with them who receive actual notice of the injunction by personal service or otherwise, and each 
of them, from violating Sections 5(a), 5(c) and 17(a) of the Securities Act, 15 U.S.C. 
$8 77e(a), 
,
77e(c) and 77q(a), Sections lo@) and 15(a) of the Exchange Act, 15 U.S.C. 
$5 78j@) and 
78o(a), and Rule lob-5 thereunder, 17 C.F.R. 
5 240.10b-5; 
) 
Permanently restraining and enjoining Rabinovich and Lovaglio, their 
officers, agents, servants, employees, attorneys in-fact, and all persons in active concert or 
participation with them who receive actual notice of the injunction by personal service or 
otherwise, and each of them, from violating from violating Section 206(4) of the Advisers Act, 
15 U.S.C. 
$ 80b-6(4), and Rule 206(4)-8, 17 C.F.R. 5 275.206(4)-8; 
(C) 
Permanently restraining and enjoining Rabinovich and Associates, its 
officers, agents, servants, employees, attorneys in-fact, and all persons in active concert or 
participation with them who receive actual notice of the injunction by personal service or 
otherwise, and each of them, from violating Section 7(a) of the Investment Company Act, 15 
U.S.C. $ 80a-7(a); 
(D) 
Directing Defendants to disgorge their ill-gotten gains from the violative 
conduct alleged in this complaint, and to pay prejudgment interest thereon; 
17 

(E) 
Directing  Defendants to pay civil money penalties pursuant to Section 
20(d) of the Securities Act, 15 U.S.C. 
5 77t(d), Section 21(d) of the Exchange Act, 15 U.S.C. 5 
78u(d), Section 209(e) of the Advisers Act, 15 U.S.C. 5 80b-9(e); and, with respect to defendant 
Rabinovich 
& Associates, pursuant to Section 42(e) of the Investment Company Act, 15 U.S.C. $ 
80a-41 (e); 
2. Grant the temporary and preliminary relief sought by the Commission in the 
application filed herewith; and 
3. 
Such other and further relief as the Court deems appropriate. 
Dated: November 26,2007 
-New York, New York 
Respectfully submitted, 
I 
I 
Mark K. Schonfeld (MS-2798) 
ATTORNEY FOR PLAINTIFF 
SECURITlES 
AND EXCHANGE COMMISSION 
New York Regional Office 
3 World Financial Center 
Room 400 
New York, New York 1028 
1 
(212) 336-0145 (Paley) 
Of Counsel: 
Andrew 
M. Calamari 
Leslie Kazon 
James 
Burt IV 
Michael Paley 
Kristine Zaleskas 

Counsel of Record: 
Mark K. Schonfeld (MS-2798) 
Attorneys for Plaintiff 
SECURITIES AND EXCHANGE COMMISSION 
New York Regional Office 
3 World Financial Center, Suite 400 
New York, NY 10281-1022 
(212) 336-0145 (Paley) 

UNITED STATES DISTRICT COURT 
SOUTHERN DISTRICT OF NEW YORK 

SECURITIES AND EXCHANGE COMMISSION, 

Plaintiff, 

against- COMPLAINT 

RABINOVICH & ASSOCIATES, LP, 
ALEX RABINOVICH AND 
JOSEPH LOVAGLIO, 

Defendants. 

Plaintiff Securities and Exchange Commission for its complaint against Rabinovich & 

Associates LP ("Rabinovich & Associates"), Alex Rabinovich ("Rabinovich") and Joseph 

Lovaglio ("Lovaglio") (collectively, "Defendants") alleges as follows: 

SUMMARY 

1. This action arises out of an ongoing, fraudulent securities offering by Alex 

Rabinovich, Rabinovich & Associates, LP, an unregistered investment company and broker- 

dealer managed by Rabinovich, and Joseph Lovaglio, a salesman and managing director at 

Rabinovich & Associates. Operating out of a storefront boiler room in Brooklyn, Defendants are 
: 

selling limited partnership interests in Rabinovich & Associates (sometimes referred to hereafter 



as the "Fund" or the "firm") and other securities to investors, including senior citizens and 

retirees. 

2. Defendants obtain investments in the Fund by cold-calling and have made, and are 

continuing 'to make, fraudulent statements to investors and prospective investors in the Fund, 

including: (1) false claims that the Fund has been extraordinarily profitable whereas the Fund's 

actual performance has been dismal; and (2) false representations that Rabinovich & Associates 

is a Wall Street firm and a member of the NASD, the New York Stock Exchange ("NYSE"), and 

the Securities Investor Protection Corporation ("SPC"). Defendants have also failed to disclose 

to investors that Rabinovich has been barred by the NASD from associating with any broker or 

dealer and that there is a pending action by the Financial Industry Regulatory Authority, Inc. 

("FINRA") seeking to bar Lovaglio from associating with any broker or dealer.' 

3. Defendants have raised at least $550,000 from at least twenty-three investors, and 

have lost most of that money, even while providing investors with quarterly account statements 

that reflect large gains and "dividends" in every period. Defendants are continuing to solicit 

investments in the Fund and the purchase of other securities and are continuing to lull existing 

Fund investors with false account statements. 

4. In addition to defrauding Fund investors and prospective investors, Defendants are 

unlawfully operating as unregistered broker-dealers and offering and selling securities in an 

unregistered offering; and defendant Rabinovich & Associates is unlawfully operating as an 

unregistered investment company. 

Effective July 30,2007, the NASD and NYSE member regulation, enforcement, and 
arbitration operations have been consolidated, creating FINRA. 

1 



5. Through t h s  conduct, and that detailed below, Defendants have violated Sections 

5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. $8 77e(a), 77e(c) 

and 77q(a), Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act"), 

15 U.S.C. $8 78j(b) and 78o(a), and Rule lob-5 thereunder, 17 C.F.R. 8 240.10b-5; Rabinovich 

has violated Section 206(4) of the Investment Advisers Act of 1940 ("Advisers Act"), 15 U.S.C. 

8 80b-6(4), and Rule 206(4)-8, 17 C.F.R. 5 275.206(4)-8; ~ o v a ~ l i o  has aided and abetted 

violations of Section 206(4) of the Advisers Act, 15 U.S.C. tj 80b-6(4), and Rule 206(4)-8, 17 

C.F.R. 8 275.206(4)-8; and Rabinovich & Associates has violated Section 7(a) of the Investment 

Company Act of 1940 ("Investment Company Act"), 15 U.S.C. 8 80a-7(a). 

6. Unless restrained and enjoined by the Court, Defendants will continue to engage 

in the transactions, acts, practices and courses of business alleged herein, and in transactions, 

acts, practices, and courses of business of a similar type and object. 

7. By this action, the Commission seeks: (a) permanent injunctive relief; (b) 

disgorgement and prejudgment interest; (c) civil penalties; (d) emergency and preliminary relief 

including (i) a temporary restraining order and preliminary injunction, (ii) asset freezes, and (iii) 

orders requiring Defendants to provide sworn accountings, permitting expedited discovery, and 

prohibiting the destruction of documents; and (e) such further relief as the Court may deem 

appropriate. 

JURISDICTION AND VENUE 

8. The Commission brings this action pursuant to authority conferred by Section 

20(b) of the Securities Act, 15 U.S.C. 8 77t(b), Section 2 1(d) of the Exchange Act, 15 U.S.C. 6 

78u(d), Section 209(d) of the Advisers Act, 15 U.S.C. 5 80b-9(d), and Section 42(d) of the 

3 



5. Through this conduct, and that detailed below, Defendants have violated Sections 

5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. 55  77e(a), 77e(c) 

and 77q(a), Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act"), 

15 U.S.C. $ 5  78j(b) and 78o(a), and Rule lob-5 thereunder, 17 C.F.R. 5 240.10b-5; Rabinovich 

has violated Section 206(4) of the Investment Advisers Act of 1940 ("Advisers Act"), 15 U.S.C. 

80b-6(4), and Rule 206(4)-8, 17 C.F.R. 5 275.206(4)-8; Lovaglio has aided and abetted 

violations of Section 206(4) of the Advisers Act, 15 U.S.C. 5 80b-6(4), and Rule 206(4)-8, 17 

C.F.R. 5 275.206(4)-8; and Rabinovich & Associates has violated Section 7(a) of the Investment 

Company Act of 1940 ("Investment Company Act"), 15 U.S.C. 5 80a-7(a). 

6. Unless restrained and enjoined by the Court, Defendants will continue to engage 

in the transactions, acts, practices and courses of business alleged herein, and in transactions, 

acts, practices, and courses of business of a similar type and object. 

7. By th~s  action, the Commission seeks: (a) permanent injunctive relief; (b) 

disgorgement and prejudgment interest; (c) civil penalties; (d) emergency and preliminary relief 

including (i) a temporary restraining order and preliminary injunction, (ii) asset freezes, and (iii) 

orders requiring Defendants to provide sworn accountings, permitting expedited discovery, and 

prohibiting the destruction of documents; and (e) such fixther relief as the Court may deem 

appropriate. 

JURISDICTION 

8. The Commission brings this action pursuant to authority conferred by Section 

20(b) of the Securities Act, 15 U.S.C. 5 77t(b), Section 21(d) of the Exchange Act, 15 U.S.C. tj 

78u(d), Section 209(d) of the Advisers Act, 15 U.S.C. 5 80b-9(d), and Section 42(d) of the 



Investment Company Act, 15 U.S.C. 5 80a-41(d). This Court has jurisdiction over this action 

pursuant to Section 22(a) of the Securities Act, 15 U.S.C. 5 77v(a), Sections 21(d), 21(e) and 27 

of the Exchange Act, 15 U.S.C. 55 78u(d), 77u(e) and 78aa, Section 2 14 of the Advisers Act, 15 

U.S.C. 5 80b-14, and Section 44 of the Investment Company Act, 15 U.S.C. 5 80a-43. 

9. Venue lies in this district pursuant to Section 22(a) of the Securities Act, 15 

U.S.C. 5 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. $78aa, Section 214 of the 

Advisers Act, 15 U.S.C. 5 80b-14, and Section 44 of the Investment Company Act, 15 U.S.C. 5 

80a-43. Certain of the transactions, acts, practices and courses of business constituting the 

violations alleged herein occurred within the Southern District of New York. 

10. Defendants, directly or indirectly, singly or in concert, have made use of the 

means or instrumentalities of transportation or communication in, or the instrumentalities of, 

interstate commerce, or of the mails, in connection with the transactions, acts, practices, and 

courses of business alleged in this complaint. 

THEDEFENDANTS  

1 1. Rabinovich & Associates, LP is a limited partnership, purportedly organized in 

December 2002 and located at 14 Wall Street, New York, NY. Its offices are actually located in 

an unmarked storefront at 502 Gravesend Neck Road, Brooklyn, NY. It is not registered in any 

capacity with the Commission, and is not a member of the NASD, the NYSE or SIPC. 

According to its website, www.ra-lp.com, Rabinovich & Associates is an "independent 

investment company whose affiliates offer a broad array of financial products and services." In 

actuality, Rabinovich & Associates is an unregistered investment company and an unregistered 

http:www.ra-lp.com


broker-dealer operating a boiler room. 

12. Alex Rabinovich, age 29, resides in Brooklyn, New York. He is the general 

partner of Rabinovich & Associates and a self-described "private wealth manager." From 

August 2001 through April 2004, Rabinovich worked as a registered representative for, 

successively, Dupont Securities Group, Inc., Indianapolis Securities, Inc. and Salomon Grey 

Financial Corporation, each of which has been the subject of significant disciplinary action. In 

March 2004, he consented to a fine of $5,000 to resolve a customer complaint of unauthorized 

trading while at Dupont. In ~ ~ 1 ~ 2 0 0 4 ,  the NASD revoked his registration for failure to pay the 

- fine, and shortly thereafter, Rabinovich consented to a bar fiom association with any NASD 

member in any capacity on the basis of his failure to respond to an NASD request to provide 

testimony. In November 2004, the NASD found Rabinovich and Dupont jointly liable in a 

customer arbitration for approximately $165,000, based on claims of fi-aud, breach of contract 

and breach of fiduciary duty. 

13. Joseph Lova~lio, age 25, resides in Brooklyn, New York. He is a managing 

director of Rabinovich & Associates and the head of its sales operation. Since 1998, he has 

worked for at least seven financial firms, at least three of which have been the subject of law 

enforcement action. Lovaglio is the subject of a pending FINRA proceeding based on his failure 

to provide FINRA with requested information and documents in connection with a customer 

allegation of fraud. ' 



Rabinovich & Associates 

14. Rabinovich & Associates holds itself out as an "independent investment 

company" and a broker-dealer "whose affiliates offer a broad array of financial products and 

services," and whose principal offices are located at 14 Wall Street. According to the 

Rabinovich & Associates limited partnership agreement, the Fund "is organized to acquire for 

investment the securities . . .of any recognized stock exchange company . . . to realize the value 

of such Securities by managing the same for the mutual benefit of the [General Partner and the 

Limited Partners]." The firm's website indicates that the Fund is divided into two funds, one of 

which follows a "moderate growth" strategy and the other of which follows an "aggressive 

growth" strategy. 

15. The limited partnership agreement confers broad powers on the general partner, 

who is Alex Rabinovich. The agreement also provides that the general partner shall receive "no 

fees, wages or payment" for managing the Fund, "except for his fifty (50%) percent profit 

realized on any transactions on behalf of the partnership[,]" and provides that the partnership 

shall bear all organizational and operating expenses. 

16. The firm's website expands only slightly on the Fund's vague investment strategy. 

It states, for example, that Rabinovich's goal is "to yield returns to individual investors that 

institutions are accustomed to[,]" and continues with such bland pronouncements as: 

The firm's model for investing complements the average investor's needs. 
The model works when capital is pooled together and distributed  

respectively. It limits risk and increases returns. . . . When many investors  
devote funds together, capital accumulates and all are more likely to turn a  
profit because of the large buying power. . . .  



17. Among the Fund's main selling points are the firm's claimed experience and the 

Fund's purported track record. The website recounts the firm's supposed "experience and 

success with institutional clients." The site W e r  represents, "Due to the fund's exceptional 

performance and the successful relationships maintained with multi-million dollar clients, the 

firm also agreed to reward average investors. . . . Therefore, at the end of 2003, the fund closed 

its doors to institutions and welcomed the average investor." 

18. Upon information and belief, there have never have been institutional investors in 

the Fund and the firm has never had any multi-million dollar clients. 

19. In marketing the Fund, Defendants extol the Fund's purported extraorbary track 

record. The Fund's website indicates that, from inception, the firm has aclveved a 127.3% return 

in its "moderate growth fund" and a 442.9% return in its "aggressive growth fund." The website 

Wher  claims, for example, that the firm achieved a 123.90% return in 2004, an 84.20% return in 

2005 and a 54.70% return in 2006. Moreover, according to the website, in the firm's worst 

quarter ever -purportedly the only quarter in the three-year period when the quarterly return was 

less than 11.80% - it achieved a 6.10% return. The website conveys that these purported returns 

are the result of the firm's "large buying poweryy and Rabinovich's trading acumen. According to 

the website, Rabinovich is "the man who is able to swim with the sharks." 

20. The Fund's website also highlights the Fund's supposed flexible redemption 

policy and lack of management fees, as well as the purported character of Rabinovich and 

Lovaglio. For example, the website contains a number of "testimonials" that extol the Fund's 

flexibility and high returns and praise Rabinovich and Lovaglio personally: 

"The thing I appreciate most is the personable service and the returns are  
phenomenal." James Bull from NV  

7 



"R&A L.P. has guided us correctly in the market and is delightful team to 
work with. Joseph Lovaglio is very easy to communicate with and a 
pleasure to do business with." Thomas Yancey from AZ 

"The only company where the firm gets compensated on performance and 
also pick[s] mostly winners providing percentage gains in any market 
conditions, where else can you do that." Dean Henderson from CA 

"I am pleased with the consistency of performance that the fund produces. 
Alex Rabinovich is honest, fiank, and very easy to deal with. He is one of 
the most trustworthy people in the industry that I have ever encountered. 
He will tell you how it is! !" Howard Hinck from NJ 

Defendants Are opera tin^ a Boiler Room 

21. The firm's primary activity is the sale of limited partnership interests in the Fund 

and other securities, including shares in a purported private placement by Datawind Net Access 

Corp. In addition, Rabinovich engages in day-trading on behalf of the Fund. 

22. Lovaglio heads the sales operation, which consists of himself and a number of 

other cold callers. Lovaglio personally makes many of the cold calls and also frequently calls 

existing Fund investors to solicit additional investments. The Fund's salesmen are paid a 

commission based on a percentage of the amount they raise. 

23. The firm targets senior citizens and unsophisticated investors. At least eleven of 

the Fund's investors are sixty years old or older, including three who are in their seventies and 

three who are in their eighties. At least three investors used their IRA money to invest in the 

Fund, with the firm's assistance and encouragement. Fund investors are located across the 

country. 

24. By means of fraudulent representations and hgh pressure sales tactics, including 

those described below, Defendants have raised at least $550,000 from at least twenty-three 

8 



investors. 

Defendants Have Made and Continue to ~ a k e  Materially False  
and Misleading Statements to Fund Investors and Prospective Investors  

25. To induce potential investors to invest in the Fund and to induce existing 

investors to make additional investments and to refer other prospective investors, Defendants 

have made numerous misrepresentations to Fund investors and prospective investors about the 

firm, the background of the firm's principals, the Fund's track record, and the performance of 

individual investors' accounts. 

26. Defendants represent on quarterly account statements mailed to investors that 

Rabinovich & Associates is a member of the NASD, the NYSE, and SIPC. Tlvs representation 

is false. The firm is not a member of the NASD or the NYSE and its customer's accounts are not 

insured by SIPC. 

27. Defendants also tout the firm's supposed Wall Street location. On account 

statements, letters to investors, the firm's website, Rabinovich's and Lovaglio's business cards, 

and the limited partnership agreements mailed to some investors, the firm has repeatedly 

represented that its office or its principal office is at 14 Wall Street. Investors have been 

instructed to, and do, send funds and signed partnerslvp agreements to the Wall Street address in 

the belief that the firm's offices are located there. In fact, the offices are in an unmarked 

Brooklyn storefront and the Wall Street address is nothing more than a commercial mail drop 

used by Defendants to create the false impression that the firm is prosperous and professional. 

28. Defendants fail to disclose to investors or potential investors that Rabinovich has 

been barred by the NASD from association with any broker or dealer, even as the firm's website 



-which does not mention Rabinovich's bar - touts his purported experience and includes a 

testimonial to his honesty. On information and belief, Defendants also fail to disclose to 

investors and prospective investors the pending FINRA proceeding against Lovaglio, which is 

not disclosed on the website. 

29. Defendants also misrepresent the Fund's track record to prospective and existing 

Fund investors. For example, the firm website states that the Fund achieved a 123.90% return in 

2004, an 84.20% return in 2005 and a 54.70% return in 2006. The same or similar performance 

claims are also contained in promotional materials sent to prospective investors. In one such 

document, Defendants touted a cumulative return of 538.01% fiom the Fund's inception in 

December 2002. 

30. Quarterly account statements sent to Fund investors also represent that the Fund is 

earning substantial returns. The account statements set forth the amount of each investor's 

"dividend," and reflect Fund performance of as much as 18.6% for a quarter and 62.278% for a 

year. 

3 1. These performance claims are false. Since it began trading, the Fund has incurred 

losses on its tradmg every quarter. 

32. Defendants have made other misrepresentations about the benefits and risks of 

investing in the Fund. For example, correspondence dated December 2006 sent to one Fund 

investor states, in part: 

Benefits of Rabinovich & Associates LP Fund Program 

-Asset diversification and the possible risk reduction associated with adding low to 
slightly negative correlation to the equity investments in your portfolio 

-A good alternative to low yielding bonds and deposits 
-Professional account management fiom a well-capitalized firm  

10  



-Liquidity of assets -redemptions may take place on a quarterly basis, with no fee or 
penalty. 

In fact, in light of its consistent losses, the Fund is not a good alternative to "low yielding bonds 

and deposits" and, upon information and belief, the firm is not well-capitalized. 

33. In addition to the misrepresentations outlined above, Lovaglio has made other 

false or misleading statements to investors and prospective investors in oral sales pitches. For 

example, Lovaglio told one investor that he was heavily invested in the Fund himself, when in 

fact he is not. Lovaglio also minimized the risks of investing in the Fund when speaking with 

investors and potential investors, by, for example, comparing an investment in the Fund to 

"money in the bank." In selling interests in the Fund, Lovaglio also engaged in other high 

pressure sales tactics. ' 

Defendants Are Continuing to Defraud Fund Investors and to Solicit Additional 
Investments 

34. Defendants are continuing to defiaud Fund investors and continuing to solicit 

additional investments in the Fund. The most recent account statements sent to Fund investors, 

for the quarter ended September 2007, repeat the false representation that the firm is a member of 

the NASD, NASD, and SPC. These statements also contain positive performance claims for the 

quarter that are inconsistent with the trading losses in the Fund's brokerage account for that 

period. In addition, at least as recently as October and November 2007, Fund investors have 

been solicited to make additional investments in the Fund. 



FIRST CLAIM FOR RELIEF  
[AllDefendants]  

Violations of Section 17(a) of the Securities Act, 15 U.S.C. 5 77q(a),  
seetion lo@) of the Exchange Act, 15 U.S.C. 5 78j@),  

and Rule lob-5 thereunder, 17 C.F.R. 6 240.10b-5  

35. The Commission repeats and realleges the allegations contained in paragraphs 1 

through 34 by reference as if fully set forth herein. 

36. The limited partnership interests in Rabinovich & Associates offered and sold by 

Defendants are securities within the meaning of Section 2(1) of the Securities Act, 15 U.S.C. 5 

77b(l), and Section 3(a)(10) of the Exchange Act, 15 U.S.C. 5 78c(a)(10). 

37. The misrepresentations and omissions described above are material. 

38. Defendants, directly and indirectly, singly and in concert, knowingly or recklessly, 

by the use of the means or instnunents of transportation or communication in, and the means or 

instnunentalities of, interstate commerce, or by the use of the mails, in the offer or sale, and in 

connection with the purchase or sale, of securities, have: (a) employed devices, schemes or 

artifices to defiaud; (b) obtained money or property by means of, or otherwise made untrue 

statements of material fact, or omitted to state material facts necessary to make the statements, in 

light of the circumstances under whch they were made, not misleading; and (c) engaged in 

transactions, acts, practices and courses of business which operated or would operate as a fiaud 

or deceit upon purchasers of securities or other persons. 

39. By reason of the foregoing, Defendants have violated, are violating, and unless 

restrained and enjoined, will continue to violate, Section 17(a) of the Securities Act, 15 U.S.C. 5 

77q(a), Section 10(b) of the Exchange Act, 15U.S.C. 5 78j(b), and Rule lob-5 thereunder, 17 



C.F.R. 8 240.10b-5. 

SECOND CLAIM FOR RELIEF 
[Rabinovich and Lovaglio] 

Violations of Section 206(4) of the Advisers Act, 15 U.S.C. 5 80b-6(4) 
and Rule 206(4)-8,17 C.F.R. 6275.206(4)-8 

40. The Commission realleges and incorporates paragraphs 1 through 39 by reference 

as if fully set forth herein. 

41. Rabinovich is an investment adviser as defined by Section 202(a)(l1) of the 

Advisers Act, 15 U.S.C. 880b-2(a)(11). 

42. The Fund is a pooled investment vehicle as defined by Advisers Act Rule 206(4)- 

8(b), 17 C.F.R. $ 275.206(4)-8(b). 

43. Rabinovich, singly and in concert with others, directly and indirectly, by use of the 

mails or any means or instrumentality of interstate commerce, engaged in acts, practices, or 

courses of business which are fraudulent, deceptive, or manipulative. Specifically, Rabinovich 

(a) made untrue statements of a material fact, or omitted to state a material fact necessary to 

make the statements made, in the light of the circumstances under which they were made, not 

misleading, to investors or prospective investors in the Fund; andlor (b) engaged in acts, 

practices, or course of business that were fraudulent, deceptive, or manipulative with respect to 

investors or prospective investors in the Fund. 

44. By reason of the foregoing, Rabinovich has violated, is violating, and unless 

enjoined, will continue to violate, Section 206(4) of the Advisers Act, 15 U.S.C. $ 80'0-6(4) and 

Rule 206(4)-8 thereunder, 17 C.F.R. $275.206(4)-8. 

i 



45. Lovaglio substantially assisted Rabinovich's violations of Section 206(4) of the 

Advisers Act, 15 U.S.C. 80b-6(4) and Rule 206(4)-8 thereunder, 17 C.F.R. 275.206(4)-8, and 

did so knowingly or recklessly. 

46. By reason of the foregoing, Lovaglio has aided and abetted, is aiding and abetting, 

and unless enjoined, will continue to aid and abet, Rabinovich's violations of Section 206(4) of 

the Advisers Act, 15 U.S.C. 5 80b-6(4) and Rule 206(4)-8 thereunder, 17 C.F.R. 5 275.206(4)-8. 

THIRD CLAIM FOR RELIEF  
JAll Defendants1  

Violations of Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. 66 77e(a) and 77e(c) 

47. The Commission realleges and incorporates paragraphs 1 through 46 by reference 

as if hlly set forth herein. 

48. No registration statement was ever filed with the Commission or in effect with 

respect to the interests in the Fund offered and sold by Defendants, and no exemption from 

registration is available. 

49. Defendants, directly or indirectly: (a) made use of the means or instruments of 

transportation or communication in interstate commerce or of the mails to sell securities through 

the use or medium of a prospectus or otherwise; or canied securities or caused such securities to 

be carried through the mails or in interstate commerce, by means or instruments of 

transportation, for the purpose of sale or for delivery after sale; and (b) made use of the means or 

instruments of transportation or communication in interstate commerce or of the mails to offer to 

sell or offer to buy, through the use or medium of any prospectus or otherwise, securities without 

a registration statement having been filed or being in effect with the Commission as to such 



securities. 

50. By reason of the foregoing, Defendants have violated, are violating, and unless 

enjoined, will continue to violate Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. 55  

77e(a) and 77e(c). 

FOURTH CLAIM FOR RELIEF 
[All Defendants] 

Violations of Section 15(a) of the Exchange Act, 15 U.S.C. 46 78o(a) 

51. The Commission realleges and incorporates paragraphs 1 through 50 by reference 

as if fully set forth herein. 

52. Defendants were engaged and continue to engage in soliciting purchases of, and 

effecting transactions in, securities issued by defendant Rabinovich & Associates and other 

securities, and received compensation based on those transactions. Neither Rabinovich & 

Associates, Rabinovich, nor Lovaglio was registered as a broker or dealer, and Rabinovich, 

Lovaglio and the other salespeople were not associated persons of a registered broker or dealer. 

53. By engaging in the conduct described above, directly or indirectly, Defendants, by 

use of the mails and the means or instrumentalities of interstate commerce, while acting as 

brokers and while engaged in the business of effecting transactions in securities for the accounts 

of others otherwise than through a national securities exchange, effected transactions in, or 

induced or attempted to induce the purchase or sale of securities (other than an exempted security 

or commercial paper, banker's acceptances, or commercial bills) without registering as a broker 

or dealer in accordance with Section 15(b) of the Exchange Act, 15 U.S.C. 5 78o(b). 

54. By reason of the foregoing, Defendants have violated, are violating, and unless 



restrained and enjoined will continue to violate, Section 15(a) of the Exchange Act, 15 U.S.C:§ 

FIFTH CLAIM FOR RELIEF 
[Rabinovich& Associates] 

Violations of Section 7(a) of the Investment Company Act, 15 U.S.C. 6 80a-7(a) 

55. The Commission realleges and incorporates paragraphs 1 through 54 by reference 

as if hlly set forth herein. 

56. Rabinovich & Associates has issued securities in a public offering and is and has 

been or has held itself out as being engaged primarily, and proposes and has proposed to engage 

primarily, in the business of investing, reinvesting, or trading in securities. 

57. Rabinovich & Associates therefore was and is an investment company under 

Section 3(a)(l) of the Investment Company Act, 15 U.S.C. 5 80a-3(a)(l). No exemption or 

exclusion is available. Accordingly, Rabinovich & Associates was and is required to register 

with the Commission under Section 7(a) of the Investment Company Act, 15 U.S.C. 5 80a-7(a). 

It is not so registered and, by acting as an investment company without being registered, has 

violated, is violating, and unless enjoined will continue to violate, Section 7(a) of the Investment 

Company Act. 

58. By reason of the foregoing, Rabinovich & Associates have violated, are violating, 

and unless restrained and enjoined will continue to violate, Section 7(a) of the Investment 

Company Act, 15 U.S.C. tj 80a-7(a). [15 U.S.C. 5 80a-7(a)] 



PRAYER FOR RELIEF 

WHEREFORE, Plaintiff Commission respectfully requests that the Court: 

1. Enter a final judgment: ' 

(A) Permanently restraining and enjoining the defendants, their officers, 

agents, servants, employees, attorneys in-fact, and all persons in active concert or participation 

with them who receive actual notice of the injunction by personal service or otherwise, and each 

of them, from violating Sections 5(a), 5(c) and 17(a) of the Securities Act, 15 U.S.C. $ 8  77e(a), 

,77e(c) and 77q(a), Sections lo@) and 15(a) of the Exchange Act, 15 U.S.C. $ 5  78j@) and 

78o(a), and Rule lob-5 thereunder, 17 C.F.R. 5 240.10b-5; 

) Permanently restraining and enjoining Rabinovich and Lovaglio, their 

officers, agents, servants, employees, attorneys in-fact, and all persons in active concert or 

participation with them who receive actual notice of the injunction by personal service or 

otherwise, and each of them, from violating from violating Section 206(4) of the Advisers Act, 

15 U.S.C. $ 80b-6(4), and Rule 206(4)-8, 17 C.F.R. 5 275.206(4)-8; 

(C) Permanently restraining and enjoining Rabinovich and Associates, its 

officers, agents, servants, employees, attorneys in-fact, and all persons in active concert or 

participation with them who receive actual notice of the injunction by personal service or 

otherwise, and each of them, from violating Section 7(a) of the Investment Company Act, 15 

U.S.C. $ 80a-7(a); 

(D) Directing Defendants to disgorge their ill-gotten gains from the violative 

conduct alleged in this complaint, and to pay prejudgment interest thereon; 

17 



(E) Directing Defendants to pay civil money penalties pursuant to Section 

20(d) of the Securities Act, 15 U.S.C. 5 77t(d), Section 21(d) of the Exchange Act, 15 U.S.C. 5 

78u(d), Section 209(e) of the Advisers Act, 15 U.S.C. 5 80b-9(e); and, with respect to defendant 

Rabinovich & Associates, pursuant to Section 42(e) of the Investment Company Act, 15 U.S.C. $ 

80a-41 (e); 

2. Grant the temporary and preliminary relief sought by the Commission in the 

application filed herewith; and 

3. Such other and further relief as the Court deems appropriate. 

Dated: November 26,2007 
-New York, New York 

Respectfully submitted, 

I 
I 

Mark K. Schonfeld (MS-2798) 
ATTORNEY FOR PLAINTIFF 
SECURITlES AND EXCHANGE COMMISSION 
New York Regional Office 
3 World Financial Center 
Room 400 
New York, New York 1028 1 
(212) 336-0145 (Paley) 

Of Counsel: 

Andrew M. Calamari 
Leslie Kazon 
James Burt IV 
Michael Paley 
Kristine Zaleskas