SEC Institutes Proceedings Against California Attorney for Falsifying Documents for Production to SEC Staff; 2011-29; January 28, 2011
California attorney David M. Tamman was accused by the SEC of falsifying private placement memoranda to conceal that investor funds were misappropriated by NewPoint’s principal John Farahi, leading to administrative proceedings seeking potential suspension or permanent bar from practicing before the SEC.
The SEC alleged that David M. Tamman, a California attorney and partner at a major international law firm, altered private placement memoranda (PPMs) during a 2009 examination of his client, NewPoint Securities LLC, to falsely imply that investors were disclosed that funds would be loaned to NewPoint’s principal, John Farahi. In reality, the vast majority of investor money was misappropriated by Farahi, and the original PPMs did not contain the added language Tamman inserted. Tamman’s conduct, which involved knowingly submitting falsified documents to SEC staff, violated Rule 102(e) of the SEC’s Rules of Practice, prompting administrative proceedings that could result in suspension or permanent denial of his privilege to appear before the Commission.
In April and May 2009, during an SEC examination of NewPoint Securities LLC, California attorney David M. Tamman altered private placement memoranda (PPMs) to falsely suggest that investors had been informed that funds raised would be loaned to NewPoint’s principal, John Farahi. The original PPMs, however, stated that investor money would be used primarily for real estate investments, and in truth, the majority of funds were misappropriated by Farahi. Tamman, a member of the California Bar and partner at a large international law firm, knowingly inserted misleading language into the documents and produced them to SEC examination and enforcement staff, despite knowing the additions were not part of the original investor disclosures. The SEC’s Office of the General Counsel charged Tamman with unethical and improper professional conduct in violation of Rule 102(e) of the SEC’s Rules of Practice. The investigation was conducted by the SEC’s Los Angeles Regional Office, with litigation led by the Office of the General Counsel. Administrative proceedings were instituted to determine the validity of the allegations and to decide on appropriate sanctions, which may include temporary or permanent denial of Tamman’s privilege to practice before the SEC. No criminal charges were filed, and the outcome remains pending the outcome of the upcoming administrative hearing.
Exhibits & Attached Documents (1)
Extracted insights
- person california attorney
- person david m. tamman
- person john farahi
- person private placement memoranda
- agency sec investigation
- agency sec litigation
- agency Securities and Exchange Commission
- person unethical professional conduct
- SEC Institutes Proceedings Against California Attorney
- Office of the General Counsel Alleges David M. Tamman Altered PPMs
- David M. Tamman Altered Private Placement Memoranda
- John Farahi Misappropriated Money Raised in Offerings
- David M. Tamman Added Language to PPMs
- David M. Tamman Engaged in Unethical Professional Conduct
- Brent Smyth and Finola H. Manvelian Conducted SEC Investigation
- Donna McCaffrey and Christopher Bruckmann Will Lead SEC Litigation
SEC Institutes Proceedings Against California Attorney for Falsifying Documents for Production to SEC Staff FOR IMMEDIATE RELEASE 2011-29 Washington, D.C., Jan. 28, 2011 — The Securities and Exchange Commission today instituted administrative proceedings against a California-based attorney for engaging in improper professional conduct during an SEC examination. Additional Materials Order Instiuting Proceedings The SEC’s Office of the General Counsel alleges that David M. Tamman — in the course of an SEC examination of his client NewPoint Securities LLC in April and May 2009 — altered private placement memoranda (PPMs) purportedly used in the offer and sale of securities issued by NewPoint Financial Services. The original PPMs purportedly provided to investors stated that the funds raised in the offerings would be used primarily for real estate related investments. In fact, the vast majority of money raised in the offerings was misappropriated by NewPoint’s principal John Farahi. The SEC’s Office of the General Counsel alleges that Tamman — a member of the California Bar and a partner at a large international law firm — added language to the PPMs to make it appear that it was disclosed to investors that much of the money raised by NewPoint would be loaned to Farahi. The PPMs were then produced to the SEC’s examination and enforcement staff. According to the Office of the General Counsel, Tamman knew that the language he added to the documents was not included in the PPMs actually provided to investors. Through his conduct, the SEC’s Office of the General Counsel alleges that Tamman engaged in unethical and improper professional conduct in violation of Rule 102(e) of the SEC’s Rules of Practice. An administrative hearing will be scheduled to determine whether the Office of the General Counsel’s allegations are true, to provide Tamman an opportunity to establish any defenses to the allegations, and to determine what sanctions, if any, are appropriate and in the public interest, including the denial, temporarily or permanently, of the privilege of appearing or practicing before the Commission pursuant to Rule 102(e). The SEC’s investigation was conducted by Brent Smyth and Finola H. Manvelian of the SEC’s Los Angeles Regional Office. The SEC’s litigation will be led by Donna McCaffrey and Christopher Bruckmann of the SEC’s Office of the General Counsel. # # # For more information about this administrative proceeding, contact: Richard M. Humes Associate General Counsel, SEC’s Office of the General Counsel (202) 551-5140 John M. McCoy Associate Regional Director, SEC’s Los Angeles Regional Office (323) 965-4561 Finola H. Manvelian Assistant Regional Director, SEC’s Los Angeles Regional Office (323) 965-3980 http://www.sec.gov/news/press/2011/2011-29.htm Home | Previous Page Modified: 01/28/2011
SEC Institutes Proceedings Against California Attorney for Falsifying Documents for Production to SEC Staff FOR IMMEDIATE RELEASE 2011-29 Washington, D.C., Jan. 28, 2011 — The Securities and Exchange Commission today instituted administrative proceedings against a California-based attorney for engaging in improper professional conduct during an SEC examination. Additional Materials Order Instiuting Proceedings The SEC’s Office of the General Counsel alleges that David M. Tamman — in the course of an SEC examination of his client NewPoint Securities LLC in April and May 2009 — altered private placement memoranda (PPMs) purportedly used in the offer and sale of securities issued by NewPoint Financial Services. The original PPMs purportedly provided to investors stated that the funds raised in the offerings would be used primarily for real estate related investments. In fact, the vast majority of money raised in the offerings was misappropriated by NewPoint’s principal John Farahi. The SEC’s Office of the General Counsel alleges that Tamman — a member of the California Bar and a partner at a large international law firm — added language to the PPMs to make it appear that it was disclosed to investors that much of the money raised by NewPoint would be loaned to Farahi. The PPMs were then produced to the SEC’s examination and enforcement staff. According to the Office of the General Counsel, Tamman knew that the language he added to the documents was not included in the PPMs actually provided to investors. Through his conduct, the SEC’s Office of the General Counsel alleges that Tamman engaged in unethical and improper professional conduct in violation of Rule 102(e) of the SEC’s Rules of Practice. An administrative hearing will be scheduled to determine whether the Office of the General Counsel’s allegations are true, to provide Tamman an opportunity to establish any defenses to the allegations, and to determine what sanctions, if any, are appropriate and in the public interest, including the denial, temporarily or permanently, of the privilege of appearing or practicing before the Commission pursuant to Rule 102(e). The SEC’s investigation was conducted by Brent Smyth and Finola H. Manvelian of the SEC’s Los Angeles Regional Office. The SEC’s litigation will be led by Donna McCaffrey and Christopher Bruckmann of the SEC’s Office of the General Counsel. # # # For more information about this administrative proceeding, contact: Richard M. Humes Associate General Counsel, SEC’s Office of the General Counsel (202) 551-5140 John M. McCoy Associate Regional Director, SEC’s Los Angeles Regional Office (323) 965-4561 Finola H. Manvelian Assistant Regional Director, SEC’s Los Angeles Regional Office (323) 965-3980 http://www.sec.gov/news/press/2011/2011-29.htm Home | Previous Page Modified: 01/28/2011