In re Petition for Disciplinary Action against Howard S. Kleyman

 
 UNITED STATES OF AMERICA 
 Be fore  the 
 SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Re le ase No. 93456 / October 28, 2021 
 
ADMINISTRATIVE PROCEEDING 
File  No. 3-20637
       
      :  
 :  
 :   
In the  Matter of : ORDER INSTITUTING ADMINISTRATIVE 
      : PROCEEDINGS PURSUANT TO RULE 
 Howard S. Kle yman,   : 102(e) OF THE COMMISSION’S RULES OF 
      : PRACTICE, MAKING FINDINGS, AND 
  Re s pondent.   : IMPOSING REMEDIAL SANCTIONS 
      :  
      :  
____________________________________ :   
   
 
I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 
public  interest that public  administrative  proceedings  be, and hereby are, instituted  against Howard 
S. Kleyman (“Respondent” or “Kleyman”) pursuant to Rule 102(e)(3)(i) of the Commission’s 
Rules of Practice.
1
   
 
II. 
 
 In anticipation  of the institution  of these proceedings,  Respondent  has submitted  an Offer 
of Settlement (the “Offer”) which the Commission  has determined to accept.  Solely for the 
purpose of these proceedings  and any other proceedings  brought  by  or on behalf of the 
Commission,  or to which the Commission  is  a party, and without  admitting  or denying  the findings 
                                              
1
 Rule 102(e)(3)(i)  provides, in relevant part, that: 
 
 The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . 
suspend from appearing or practicing before it any attorney . . . who has been by name (A) [p]ermanently enjoined 
by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, 
from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and 
regulations thereunder; or (B) [f]ound by any court of competent jurisdiction in an action brought by the 
Commission to which he or she is a party ... to have violated (unless the violation was found not to have been 
willful)  or aided and abetted the violation of any provision of the Federal securities laws or of the rules and 
regulations thereunder.  

 2 
herein, except as to the Commission’s jurisdiction  over him and the subject matter of these 
proceedings, and the findings  contained in paragraph 2 of Section III below,  which are admitted, 
Respondent consents to  the entry of this  Order Instituting  Administrative  Proceedings Pursuant to 
Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing  Remedial 
Sanctions (“Order”), as set forth below.   
 
III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission  finds that:  
 
1. Kleyman,  age 80, resides in  St. Paul, Minnesota.  Kleyman has never held 
any securities licenses and is not  registered with the Commission  in  any capacity.  He was 
previously  licensed to practice law in  the state of Minnesota,  but was disbarred on June 9, 2021.  
See In re Petition  for Disciplinary  Action  against  Howard S. Kleyman,  File  No. A20-1304 
(Minn.  Sup.  Ct. 2020). 
 
2. On August 30, 2021 the Commission  filed  a complaint  against Kleyman  in 
SEC v. Howard S. Kleyman (Civil  Action No. 21-1943), in  the United  States District Court for the 
District  of Minnesota.   On October 8, 2021, the court entered an order permanently  enjoining 
Kleyman by consent, from future violations  of Sections 17(a) of the Securities Act of 1933,  and 
Section 10(b) of the Securities Exchange Act of 1934  and Rule 10b-5  thereunder.  The court’s order 
also permanently enjoined  Kleyman from directly  or indirectly  participating  in, including acting 
as a paymaster in  connection  with,  the issuance,  offer, or sale  of any security,  including  but not 
limited  to  bank  guarantees, medium  term notes,  standby  letters of  credit,  and  similar  instruments; 
provided,  however,  that this  injunction shall  not  prevent  Defendant from  purchasing  or selling 
securities  listed  on a national  securities  exchange  for his own  personal  account. 
 
3. The Commission’s complaint alleged, among other things, that Kleyman 
facilitated a series of investments in  prime bank schemes by acting as a paymaster for fraudulent 
transactions.  As paymaster, Kleyman accepted at least $1.22 million  in investors’ funds into  his 
attorney IOLTA account.  The investors’ funds were advanced fees for the purchase or lease of 
fictitious  bank instruments,  such as standby letters of credit or bank guarantees, from a Panamanian 
company,  The Hanson Group  of Companies S.A., run by Harold Soto Boigues (“Soto”).  Kleyman 
disbursed the investors’ funds per Soto’s instructions, without performing any inquiry into whether 
the investors had received the promised  bank instruments  or returns.  Kleyman agreed to act as 
paymaster, and continued  acting as paymaster for two years, despite multiple  red flags indicating 
that the transactions were fraudulent.       
 
IV. 
 
 In view of the foregoing,  the Commission  deems it  appropriate and in  the public  interest to 
impose  the sanction agreed to in  Respondent Kleyman’s Offer. 
 

 3 
 Accordingly,  it  is hereby ORDERED pursuant to Rule 102(e)(3)(i) of the Commission’s 
Rules of Practice, effective immediately,  that Kleyman is suspended from appearing  or practicing 
before the Commission. 
 
 
 By the Commission. 
 
 
 
Vanessa A. Countryman 
Secretary 
 

UNITED STATES OF AMERICA 

 Before the 

 SECURITIES AND EXCHANGE COMMISSION 
 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 93456 / October 28, 2021 

 

ADMINISTRATIVE PROCEEDING 

File No. 3-20637
       

      :  

 :  

 :   

In the Matter of : ORDER INSTITUTING ADMINISTRATIVE 

      : PROCEEDINGS PURSUANT TO RULE 

 Howard S. Kleyman,   : 102(e) OF THE COMMISSION’S RULES OF 

      : PRACTICE, MAKING FINDINGS, AND 

  Respondent.   : IMPOSING REMEDIAL SANCTIONS 

      :  

      :  

____________________________________ :   

   

 

I. 
 
 The Securities and Exchange Commission (“Commission”) deems it appropriate and in the 

public interest that public administrative proceedings be, and hereby are, instituted against Howard 
S. Kleyman (“Respondent” or “Kleyman”) pursuant to Rule 102(e)(3)(i) of the Commission’s 
Rules of Practice.1   

 

II. 
 
 In anticipation of the institution of these proceedings, Respondent has submitted an Offer 
of Settlement (the “Offer”) which the Commission has determined to accept.  Solely for the 

purpose of these proceedings and any other proceedings brought by or on behalf of the 
Commission, or to which the Commission is a party, and without admitting or denying the findings 

                                              
1 Rule 102(e)(3)(i) provides, in relevant part, that: 
 
 The Commission, with due regard to the public interest and without preliminary hearing, may, by order, . . . 
suspend from appearing or practicing before it any attorney . . . who has been by name (A) [p]ermanently enjoined 

by any court of competent jurisdiction, by reason of his or her misconduct in an action brought by the Commission, 
from violating or aiding and abetting the violation of any provision of the Federal securities laws or of the rules and 

regulations thereunder; or (B) [f]ound by any court of competent jurisdiction in an action brought by the 
Commission to which he or she is a party … to have violated (unless the violation was found not to have been 
willful) or aided and abetted the violation of any provision of the Federal securities laws or of the rules and 

regulations thereunder.  



 2 

herein, except as to the Commission’s jurisdiction over him and the subject matter of these 
proceedings, and the findings contained in paragraph 2 of Section III below, which are admitted, 
Respondent consents to the entry of this Order Instituting Administrative Proceedings Pursuant to 

Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial 
Sanctions (“Order”), as set forth below.   
 

III. 
 
 On the basis of this Order and Respondent’s Offer, the Commission finds that:  
 

1. Kleyman, age 80, resides in St. Paul, Minnesota.  Kleyman has never held 

any securities licenses and is not registered with the Commission in any capacity.  He was 
previously licensed to practice law in the state of Minnesota, but was disbarred on June 9, 2021.  
See In re Petition for Disciplinary Action against Howard S. Kleyman, File No. A20-1304 
(Minn. Sup. Ct. 2020). 

 
2. On August 30, 2021 the Commission filed a complaint against Kleyman in 

SEC v. Howard S. Kleyman (Civil Action No. 21-1943), in the United States District Court for the 

District of Minnesota.  On October 8, 2021, the court entered an order permanently enjoining 

Kleyman by consent, from future violations of Sections 17(a) of the Securities Act of 1933, and 

Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.  The court’s order 

also permanently enjoined Kleyman from directly or indirectly participating in, including acting 

as a paymaster in connection with, the issuance, offer, or sale of any security, including but not 

limited to bank guarantees, medium term notes, standby letters of credit, and similar instruments; 

provided, however, that this injunction shall not prevent Defendant from purchasing or selling 

securities listed on a national securities exchange for his own personal account. 

 

3. The Commission’s complaint alleged, among other things, that Kleyman 
facilitated a series of investments in prime bank schemes by acting as a paymaster for fraudulent 

transactions.  As paymaster, Kleyman accepted at least $1.22 million in investors’ funds into his 
attorney IOLTA account.  The investors’ funds were advanced fees for the purchase or lease of 
fictitious bank instruments, such as standby letters of credit or bank guarantees, from a Panamanian 
company, The Hanson Group of Companies S.A., run by Harold Soto Boigues (“Soto”).  Kleyman 

disbursed the investors’ funds per Soto’s instructions, without performing any inquiry into whether 
the investors had received the promised bank instruments or returns.  Kleyman agreed to act as 
paymaster, and continued acting as paymaster for two years, despite multiple red flags indicating 
that the transactions were fraudulent.       

 

IV. 

 
 In view of the foregoing, the Commission deems it appropriate and in the public interest to 

impose the sanction agreed to in Respondent Kleyman’s Offer. 
 



 3 

 Accordingly, it is hereby ORDERED pursuant to Rule 102(e)(3)(i) of the Commission’s 
Rules of Practice, effective immediately, that Kleyman is suspended from appearing or practicing 
before the Commission. 

 
 
 By the Commission. 
 

 
 

Vanessa A. Countryman 
Secretary