SEC v. Benil Finance, Ltd., No. LR-18331, Southern District of Florida (Sept. 9, 2003) — Press Release
raw: Benil Finance, Ltd.
Benil Finance, Ltd., No. LR-18331 (Sept. 9, 2003)
The SEC filed a subpoena enforcement action against offshore entity Benil Finance, Ltd., controlled by Jeannine Gurian and Rheal Cote, for refusing to produce documents on Hienergy Technologies' stock ownership and financial accounts, despite evidence of at least eight undisclosed brokerage and bank accounts, to uncover potential securities fraud involving false disclosures about Hienergy's control and shareholders.
The SEC initiated a subpoena enforcement action against Benil Finance, Ltd., an offshore entity, alleging it withheld documents critical to an investigation into fraudulent misrepresentations about Hienergy Technologies, Inc. Benil, controlled by Jeannine Gurian (mother of recidivist Philip Gurian) and Rheal Cote (Hienergy’s former sole director and 61% shareholder), produced only limited records from two brokerage accounts but refused to produce documents from at least six other brokerage and two bank accounts, claiming no obligation beyond materials in Jeannine Gurian’s personal possession. The SEC’s June 20, 2003 subpoena sought records on Hienergy stock ownership, communications with investors and Philip Gurian, and financial accounts, and sought a court order compelling full compliance to uncover potential securities fraud.
The Securities and Exchange Commission filed a subpoena enforcement action against Benil Finance, Ltd., an offshore entity, for failing to comply with a June 20, 2003 subpoena demanding documents related to its alleged ownership of nearly 9% of Hienergy Technologies, Inc. stock and communications with key figures including Rheal Cote and Philip Gurian. Benil, controlled by Jeannine Gurian—Philip Gurian’s mother—and Rheal Cote, who was Hienergy’s former sole director and disclosed owner of 61% of its stock, claimed it had no legal obligation to produce documents not in Jeannine Gurian’s personal possession. Despite this claim, the SEC had evidence of at least eight additional brokerage and bank accounts linked to Benil that remained unproduced, raising suspicions of deliberate obstruction. The SEC’s Formal Order, issued April 1, 2003, authorized an investigation into false and misleading statements regarding Hienergy’s officers, directors, control persons, and major shareholders. Benil produced only minimal documentation from two brokerage accounts, asserting it had no further records, while the SEC contended these were merely a fraction of the relevant materials. The Commission sought a court order compelling Benil to fully comply with the subpoena and show cause why it should not be held in contempt for noncompliance. No criminal charges or monetary penalties were yet sought at this stage; the focus was solely on securing full document production to uncover potential securities fraud and undisclosed control structures surrounding Hienergy.
Extracted insights
- agency Securities and Exchange Commission
- company subpoena enforcement action against benil finance, ltd.
- Securities and Exchange Commission Commenced Subpoena Enforcement Action Against Benil Finance, Ltd.
- Securities and Exchange Commission Issued Subpoena on June 20, 2003
- Securities and Exchange Commission Alleges Benil Owning Nearly 9% of Hienergy Stock
- Application and Supporting Filings Allege Benil's President is Jeannine Gurian
- Application and Supporting Filings Allege Benil's Vice President is Rheal Cote
- Application and Supporting Filings Allege Rheal Cote is Hienergy's Former Sole Director
- Application and Supporting Filings Allege Rheal Cote is Disclosed Owner of 61% of Hienergy Stock
- Securities and Exchange Commission Issued Subpoena to Benil Requiring Production of Documents
- Securities and Exchange Commission Asserts Documents are Relevant to Investigation
- Benil Produced Documents Relating to Two Brokerage Accounts
- Benil Declined to Produce Documents Relating to Six Other Brokerage Accounts and Two Bank Accounts
- Benil Informed Commission It Has No Obligation to Produce Documents Not in Jeannine Gurian's Possession
- Securities and Exchange Commission Seeks Order Directing Benil to Show Cause Why It Should Not Comply With Subpoena
- Securities and Exchange Commission Seeks Order Requiring Benil to Comply Fully With Subpoena
LITIGATION RELEASE NO. 18331 / September 9, 2003 SECURITIES AND EXCHANGE COMMISSION v. BENIL FINANCE, LTD. [SEC v. Benil Finance, Ltd., Civ. No. 03-61687 (USDC S.D. Florida)] The Securities and Exchange Commission announced today that it has commenced a subpoena enforcement action against Benil Finance, Ltd. ("Benil"), an offshore entity, in the United States District Court for the Southern District of Florida. The Commission issued the subpoena on June 20, 2003, which, as extended, required Benil to produce documents by August 8, 2003. In its Application and supporting filings, the Commission alleges that, on April 1, 2003, it issued a Formal Order Directing Private Investigation and Designating Officers to Take Testimony. The Formal Order authorizes the staff to conduct an investigation into whether certain entities and individuals made false and misleading statements concerning Hienergy Technologies, Inc. ("Hienergy") including, but not limited to, the identity of its officers, directors, control persons and major shareholders. The Commission's Application and supporting filings allege that Benil has reported owning nearly 9% of the stock of Hienergy, a Delaware corporation with offices in Irvine, California. The Application and supporting filings further allege that the president of Benil is Jeannine Gurian, the mother of recidivist Philip Gurian, and its vice president is Jeannine Gurian's live-in boyfriend, Rheal Cote, who is Hienergy's former sole director and disclosed owner of 61% of Hienergy stock. Moreover, the Application and supporting filings allege that, on June 20, 2003, the staff issued a subpoena to Benil requiring it to produce documents concerning, among other things: (1) ownership of Hienergy stock; (2) communications with Hienergy investors and/or Philip Gurian, and (3) Benil's bank and brokerage records. The Commission asserts that these documents are relevant to its investigation. Finally, the Commission's Application and supporting filings further allege that Benil produced documents relating to two brokerage accounts in response to the subpoena, which purportedly were all of the documents in Jeannine Gurian's personal possession, but declined to produce documents relating to at least six other brokerage accounts and two bank accounts whose existence is known to the staff. According to the Application and supporting filings, Benil has informed the Commission that it has no obligation to produce documents not in Jeannine Gurian's personal possession. Pursuant to its Application, the Commission is seeking an Order directing Benil to show cause why it should not be ordered by the Court to produce documents pursuant to the Commission's subpoena and an Order requiring it to comply fully with the Commission's subpoena.LITIGATION RELEASE NO. 18331 / September 9, 2003 SECURITIES AND EXCHANGE COMMISSION v. BENIL FINANCE, LTD. [SEC v. Benil Finance, Ltd., Civ. No. 03-61687 (USDC S.D. Florida)] The Securities and Exchange Commission announced today that it has commenced a subpoena enforcement action against Benil Finance, Ltd. ("Benil"), an offshore entity, in the United States District Court for the Southern District of Florida. The Commission issued the subpoena on June 20, 2003, which, as extended, required Benil to produce documents by August 8, 2003. In its Application and supporting filings, the Commission alleges that, on April 1, 2003, it issued a Formal Order Directing Private Investigation and Designating Officers to Take Testimony. The Formal Order authorizes the staff to conduct an investigation into whether certain entities and individuals made false and misleading statements concerning Hienergy Technologies, Inc. ("Hienergy") including, but not limited to, the identity of its officers, directors, control persons and major shareholders. The Commission's Application and supporting filings allege that Benil has reported owning nearly 9% of the stock of Hienergy, a Delaware corporation with offices in Irvine, California. The Application and supporting filings further allege that the president of Benil is Jeannine Gurian, the mother of recidivist Philip Gurian, and its vice president is Jeannine Gurian's live-in boyfriend, Rheal Cote, who is Hienergy's former sole director and disclosed owner of 61% of Hienergy stock. Moreover, the Application and supporting filings allege that, on June 20, 2003, the staff issued a subpoena to Benil requiring it to produce documents concerning, among other things: (1) ownership of Hienergy stock; (2) communications with Hienergy investors and/or Philip Gurian, and (3) Benil's bank and brokerage records. The Commission asserts that these documents are relevant to its investigation. Finally, the Commission's Application and supporting filings further allege that Benil produced documents relating to two brokerage accounts in response to the subpoena, which purportedly were all of the documents in Jeannine Gurian's personal possession, but declined to produce documents relating to at least six other brokerage accounts and two bank accounts whose existence is known to the staff. According to the Application and supporting filings, Benil has informed the Commission that it has no obligation to produce documents not in Jeannine Gurian's personal possession. Pursuant to its Application, the Commission is seeking an Order directing Benil to show cause why it should not be ordered by the Court to produce documents pursuant to the Commission's subpoena and an Order requiring it to comply fully with the Commission's subpoena.