In re DAVID M. TAMMAN

 1
UNITED STATES OF AMERICA 
Before the 
SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 63785 / January 27, 2011 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-14207 
 
 
 
In the Matter of 
 
          DAVID M. TAMMAN, ESQ. 
 
Respondent. 
 
 
ORDER INSTITUTING ADMINISTRATIVE 
PROCEEDINGS PURSUANT TO SECTION 4C 
OF THE SECURITIES EXCHANGE ACT OF 
1934 AND RULE 102(e) OF THE 
COMMISSION’S RULES OF PRACTICE 
 
 
 
 
    
 
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 David 
M. Tamman, Esq. (“Tamman” or “Respondent”) pursuant to Section 4C of the Securities 
Exchange Act of 1934 (“Exchange Act”) and Rule 102(e)(1)(ii) of the Commission’s Rules of 
Practice.
1
 
 
II. 
 
 After a referral from the Los Angeles Regional Office and an investigation, the Office of 
the General Counsel alleges that: 
                                                           
1  Rule 102(e)(1)(ii), 17 C.F.R. 201.102(e)(1)(ii), provides, in pertinent part, that: 
 
The Commission may . . . deny, temporarily or permanently, the privilege of appearing or 
practicing before it in any way to any person who is found by the Commission . . . to have 
engaged in unethical or improper professional conduct . . . . 
 
Section 4C(a), 15 U.S.C. 78d-3(a), provides, in pertinent part, that: 
 
The Commission may . . . deny, temporarily or permanently, to any person the privilege of 
appearing or practicing before the Commission in any way, if that person is found by the 
Commission . . . to have engaged in unethical or improper professional conduct . . . . 
 

 2
 
            A.                        RESPONDENT
 
 
 Tamman is an attorney and a member of the California Bar.  He is 43 years old and 
is a resident of Santa Monica, California.  
 
B. IMPROPER PROFESSIONAL CONDUCT
 
 
 1. From approximately May 2003 through approximately October 2009, 
Tamman represented NewPoint Financial Services, Inc. (“NewPoint”) in connection with a 
number of corporate transactional matters, including several offerings of debentures issued by 
NewPoint.  Between approximately May 2003 and approximately January 2009, Tamman prepared 
several versions of private placement memoranda (PPMs) to be provided to investors in 
NewPoint’s debentures offerings.  Those PPMs 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.  See SEC v. NewPoint 
Financial Services, Inc., et al. (Case No. CV10-0124 DDP (JEMx), C.D. Cal.), Docket Nos. 1, 39, 
and 42. 
 
 2. In March 2009, Tamman, then a partner in the Los Angeles, California 
office of a large international law firm, arranged a call with himself, two other attorneys at the law 
firm (Attorney A and Attorney B), and John Farahi to discuss disclosures to be added to a PPM to 
be used for a future NewPoint offering.  On that call, Mr. Farahi said that most of the money raised 
would be loaned to him.  He also indicated that most of the money raised in the previous offerings 
had been loaned to him.  Later that month, Attorney A proposed adding several disclosures to the 
PPM regarding loans to be made to John Farahi.  Tamman had Attorney B, an associate at the law 
firm, add the proposed disclosures to a draft PPM to be used for a future offering.  That was the 
first time that such language regarding loans to John Farahi appeared in any NewPoint PPM. 
 
 3. On April 13, 2009, the Commission’s Los Angeles Regional Office 
examination staff initiated an unannounced examination of NewPoint Securities, LLC (a broker-
dealer affiliated with NewPoint).  That same day, Tamman met with John Farahi in person to 
discuss the Commission’s examination.  Later that day, Tamman, for the first time, added 
purported disclosures regarding loans to John Farahi to a PPM dated October 2008.  On May 14, 
2009, Tamman added, for the first time, similar purported disclosures to a PPM dated May 2003.  
Tamman knew that the language regarding loans to John Farahi that he added to the PPMs were 
not contained in PPMs provided to investors in May 2003 or October 2008. 
 
 4. During the course of its examination, the staff discovered information 
indicating that NewPoint might be engaged in an offering fraud.  In mid-May 2009, examination 
staff notified the Commission’s enforcement staff of its findings and later the Commission issued a 
formal order of investigation.  On May 19, 2009, the Commission’s examination staff provided 
NewPoint Securities with formal document requests seeking, among other things, copies of any 
PPMs provided to NewPoint investors.  The next day, another attorney at Tamman’s law firm 
(Attorney C) gave Tamman a document retention memorandum that stated that, given the ongoing 

 3
Commission examination, it was important that NewPoint not “discard, alter or destroy any [] 
documents or records.” (emphasis in original).  After Tamman agreed that the memorandum 
should be provided to NewPoint, Attorney C sent the document retention memorandum to 
NewPoint (copying Tamman) along with an article regarding obstruction of justice charges 
brought by the United States Attorney’s office in Houston against an individual for obstructing a 
Commission investigation. 
 
 5. Later in May 2009, NewPoint retained new outside counsel (Attorney D) to 
represent it in connection with the Commission’s examination of NewPoint Securities and any 
related enforcement inquiries.  In response to requests from Attorney D for copies of PPMs to be 
produced to the Commission, Tamman provided the versions of the PPMs dated May 2003 and 
October 2008 that he had altered to add disclosures regarding loans to John Farahi.  On June 8, 
2009, those altered PPMs were produced to the Commission in response to the formal document 
requests by the Commission’s examination staff.  The altered PPMs were later produced in 
response to a subpoena served by the Commission’s enforcement staff seeking, among other 
things, copies of all PPMs provided to NewPoint investors. 
 
 6. In mid-July 2009, Attorney D told Tamman that the Commission’s 
enforcement staff was insisting on production of native file copies of the PPMs with metadata 
showing when the documents were created.  On July 14, 2009, Tamman forwarded an email to 
Attorney C regarding a seminar on the ethical implications of removing metadata from documents.  
Only two days later, Tamman asked his law firm’s IT department to remove metadata from the 
native file copies of the PPMs that had been produced to the Commission.  He then produced the 
documents, in their altered, metadata-less form to Attorney D with the understanding that the 
documents were to be reviewed for possible production to the Commission.  Attorney D continued 
to press Tamman to provide native file copies of all versions of the PPMs, not just those produced 
to the Commission.  After repeatedly resisting providing the documents, Tamman finally provided 
them to Attorney D on July 31, 2009, stressing that he wanted to be informed before the documents 
were provided to the Commission so that he could assert any potential work product objections.  
Tamman never told Attorney D or other attorneys at his law firm working on the matter that he had 
altered the PPMs that were produced to the Commission’s examination and enforcement staff. 
 
C. VIOLATIONS
 
 
 As a result of the conduct described above, Tamman engaged in improper professional 
conduct and is subject to discipline pursuant to Section 4C of the Exchange Act and Rule 
102(e)(1)(ii) of the Commission’s Rules of Practice. 
 
Tamman’s knowing conduct violates California Business and Professions Code § 6106 
providing for the disbarment or suspension of an attorney engaged in “[t]he commission of any act 
involving moral turpitude, dishonesty, or corruption . . . .” 
 
Tamman’s knowing conduct violates California Rules of Professional Conduct § 5-220 
which prohibits a member of the California Bar from “suppress[ing] any evidence that the member 
or the member’s client has a legal obligation to reveal or to produce.” 

 4
 
Tamman’s knowing conduct further violates 18 U.S.C. § 1519 which makes it a crime to 
“knowingly alter[], destroy[], mutilate[], conceal[], cover[] up, falsif[y], or make[] a false entry in 
any record, document, or tangible object with the intent to impede, obstruct, or influence the 
investigation or proper administration of any matter within the jurisdiction of any department or 
agency of the United States. . . .”  See also California Penal Code § 135 (making it a crime to 
destroy or conceal evidence to be produced in an investigation). 
 
III. 
 
In view of the allegations made by the Office of the General Counsel, the Commission 
deems it necessary and appropriate in the public interest that public administrative proceedings be 
instituted to determine: 
 
A. Whether the allegations set forth in Section II are true and, in connection therewith, 
to afford Tamman an opportunity to establish any defenses to such allegations; and  
 
B. What, if any, remedial action is appropriate in the public interest against Tamman 
pursuant to Section 4C of the Exchange Act and Rule 102(e) of the Commission’s Rules of 
Practice including, but not limited to, denying, temporarily or permanently, the privilege of 
appearing or practicing before the Commission.  
 
IV. 
 
IT IS ORDERED that a public hearing for the purpose of taking evidence on the questions 
set forth in Section III hereof shall be convened at a time and place to be fixed, and before an 
Administrative Law Judge to be designated by further order as provided by Rule 110 of the 
Commission's Rules of Practice, 17 C.F.R. § 201.110. 
 
IT IS FURTHER ORDERED that Tamman shall file an Answer to the allegations 
contained in this Order within twenty (20) days after service of this Order, as provided by Rule 220 
of the Commission's Rules of Practice, 17 C.F.R. § 201.220.  
 
If Tamman fails to file the directed answer, or fails to appear at a hearing after being duly 
notified, the Respondent may be deemed in default and the proceedings may be determined against 
him upon consideration of this Order, the allegations of which may be deemed to be true as 
provided by Rules 155(a), 220(f), 221(f) and 310 of the Commission's Rules of Practice, 17 C.F.R.  
§§ 201.155(a), 201.220(f), 201.221(f) and 201.310. 
 
This Order shall be served forthwith upon Respondent personally or by certified mail. 
 
IT IS FURTHER ORDERED that the Administrative Law Judge shall issue an initial 
decision no later than 300 days from the date of service of this Order, pursuant to Rule 360(a)(2) 
of the Commission’s Rules of Practice, 17 C.F.R. § 201.360(a)(2). 
 

 5
In the absence of an appropriate waiver, no officer or employee of the Commission 
engaged in the performance of investigative or prosecuting functions in this or any factually 
related proceeding will be permitted to participate or advise in the decision of this matter, except 
as witness or counsel in proceedings held pursuant to notice.  Since this proceeding is not “rule 
making” within the meaning of Section 551 of the Administrative Procedure Act, it is not deemed 
subject to the provisions of Section 553 delaying the effective date of any final Commission 
action. 
 
            By            the            Commission.            
 
 
 
        Elizabeth M. Murphy 
        Secretary 

 6
Service List 
 
 Rule 141 of the Commission's Rules of Practice provides that the Secretary, or another duly authorized 
officer of the Commission, shall serve a copy of the Order Instituting Administrative Proceedings Pursuant to Section 
4C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice ("Order"), on the 
Respondent and his legal agent. 
 
 The attached Order has been sent to the following parties and other persons entitled to notice: 
 
Honorable Brenda P. Murray    
Chief Administrative Law Judge   
Securities and Exchange Commission  
100 F Street, N.E. 
Washington, DC 20549-2557                                                                      
 
Christopher M. Bruckmann, Esq.       
Office of the General Counsel    
Securities and Exchange Commission   
100 F Street, N.E.  
Washington, DC 20549-9612 
 
Mr. David M. Tamman   
c/o Thomas Hanusik, Esq. 
Crowell & Moring LLP 
1001 Pennsylvania Avenue, N.W.   
Washington, DC 20004    
             
Thomas Hanusik, Esq.   
Crowell & Moring LLP 
1001 Pennsylvania Avenue, N.W.   
Washington, DC 20004   
(Counsel for David M. Tamman) 
 

1

UNITED STATES OF AMERICA 
Before the 

SECURITIES AND EXCHANGE COMMISSION 
 
SECURITIES EXCHANGE ACT OF 1934 
Release No. 63785 / January 27, 2011 
 
ADMINISTRATIVE PROCEEDING 
File No. 3-14207 
 
 
 
In the Matter of 
 
          DAVID M. TAMMAN, ESQ. 
 
Respondent. 
 
 

ORDER INSTITUTING ADMINISTRATIVE 
PROCEEDINGS PURSUANT TO SECTION 4C 
OF THE SECURITIES EXCHANGE ACT OF 
1934 AND RULE 102(e) OF THE 
COMMISSION’S RULES OF PRACTICE 
 
 
 
 
    

 
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 David 
M. Tamman, Esq. (“Tamman” or “Respondent”) pursuant to Section 4C of the Securities 
Exchange Act of 1934 (“Exchange Act”) and Rule 102(e)(1)(ii) of the Commission’s Rules of 
Practice.1 
 

II. 
 
 After a referral from the Los Angeles Regional Office and an investigation, the Office of 
the General Counsel alleges that: 
                                                           
1  Rule 102(e)(1)(ii), 17 C.F.R. 201.102(e)(1)(ii), provides, in pertinent part, that: 
 

The Commission may . . . deny, temporarily or permanently, the privilege of appearing or 
practicing before it in any way to any person who is found by the Commission . . . to have 
engaged in unethical or improper professional conduct . . . . 

 
Section 4C(a), 15 U.S.C. 78d-3(a), provides, in pertinent part, that: 
 

The Commission may . . . deny, temporarily or permanently, to any person the privilege of 
appearing or practicing before the Commission in any way, if that person is found by the 
Commission . . . to have engaged in unethical or improper professional conduct . . . . 
 



 2

 
 A.  RESPONDENT 
 

 Tamman is an attorney and a member of the California Bar.  He is 43 years old and 
is a resident of Santa Monica, California.  

 
B. IMPROPER PROFESSIONAL CONDUCT 
 
 1. From approximately May 2003 through approximately October 2009, 

Tamman represented NewPoint Financial Services, Inc. (“NewPoint”) in connection with a 
number of corporate transactional matters, including several offerings of debentures issued by 
NewPoint.  Between approximately May 2003 and approximately January 2009, Tamman prepared 
several versions of private placement memoranda (PPMs) to be provided to investors in 
NewPoint’s debentures offerings.  Those PPMs 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.  See SEC v. NewPoint 
Financial Services, Inc., et al. (Case No. CV10-0124 DDP (JEMx), C.D. Cal.), Docket Nos. 1, 39, 
and 42. 

 
 2. In March 2009, Tamman, then a partner in the Los Angeles, California 

office of a large international law firm, arranged a call with himself, two other attorneys at the law 
firm (Attorney A and Attorney B), and John Farahi to discuss disclosures to be added to a PPM to 
be used for a future NewPoint offering.  On that call, Mr. Farahi said that most of the money raised 
would be loaned to him.  He also indicated that most of the money raised in the previous offerings 
had been loaned to him.  Later that month, Attorney A proposed adding several disclosures to the 
PPM regarding loans to be made to John Farahi.  Tamman had Attorney B, an associate at the law 
firm, add the proposed disclosures to a draft PPM to be used for a future offering.  That was the 
first time that such language regarding loans to John Farahi appeared in any NewPoint PPM. 

 
 3. On April 13, 2009, the Commission’s Los Angeles Regional Office 

examination staff initiated an unannounced examination of NewPoint Securities, LLC (a broker-
dealer affiliated with NewPoint).  That same day, Tamman met with John Farahi in person to 
discuss the Commission’s examination.  Later that day, Tamman, for the first time, added 
purported disclosures regarding loans to John Farahi to a PPM dated October 2008.  On May 14, 
2009, Tamman added, for the first time, similar purported disclosures to a PPM dated May 2003.  
Tamman knew that the language regarding loans to John Farahi that he added to the PPMs were 
not contained in PPMs provided to investors in May 2003 or October 2008. 

 
 4. During the course of its examination, the staff discovered information 

indicating that NewPoint might be engaged in an offering fraud.  In mid-May 2009, examination 
staff notified the Commission’s enforcement staff of its findings and later the Commission issued a 
formal order of investigation.  On May 19, 2009, the Commission’s examination staff provided 
NewPoint Securities with formal document requests seeking, among other things, copies of any 
PPMs provided to NewPoint investors.  The next day, another attorney at Tamman’s law firm 
(Attorney C) gave Tamman a document retention memorandum that stated that, given the ongoing 



 3

Commission examination, it was important that NewPoint not “discard, alter or destroy any [] 
documents or records.” (emphasis in original).  After Tamman agreed that the memorandum 
should be provided to NewPoint, Attorney C sent the document retention memorandum to 
NewPoint (copying Tamman) along with an article regarding obstruction of justice charges 
brought by the United States Attorney’s office in Houston against an individual for obstructing a 
Commission investigation. 

 
 5. Later in May 2009, NewPoint retained new outside counsel (Attorney D) to 

represent it in connection with the Commission’s examination of NewPoint Securities and any 
related enforcement inquiries.  In response to requests from Attorney D for copies of PPMs to be 
produced to the Commission, Tamman provided the versions of the PPMs dated May 2003 and 
October 2008 that he had altered to add disclosures regarding loans to John Farahi.  On June 8, 
2009, those altered PPMs were produced to the Commission in response to the formal document 
requests by the Commission’s examination staff.  The altered PPMs were later produced in 
response to a subpoena served by the Commission’s enforcement staff seeking, among other 
things, copies of all PPMs provided to NewPoint investors. 

 
 6. In mid-July 2009, Attorney D told Tamman that the Commission’s 

enforcement staff was insisting on production of native file copies of the PPMs with metadata 
showing when the documents were created.  On July 14, 2009, Tamman forwarded an email to 
Attorney C regarding a seminar on the ethical implications of removing metadata from documents.  
Only two days later, Tamman asked his law firm’s IT department to remove metadata from the 
native file copies of the PPMs that had been produced to the Commission.  He then produced the 
documents, in their altered, metadata-less form to Attorney D with the understanding that the 
documents were to be reviewed for possible production to the Commission.  Attorney D continued 
to press Tamman to provide native file copies of all versions of the PPMs, not just those produced 
to the Commission.  After repeatedly resisting providing the documents, Tamman finally provided 
them to Attorney D on July 31, 2009, stressing that he wanted to be informed before the documents 
were provided to the Commission so that he could assert any potential work product objections.  
Tamman never told Attorney D or other attorneys at his law firm working on the matter that he had 
altered the PPMs that were produced to the Commission’s examination and enforcement staff. 

 
C. VIOLATIONS 

 
 As a result of the conduct described above, Tamman engaged in improper professional 
conduct and is subject to discipline pursuant to Section 4C of the Exchange Act and Rule 
102(e)(1)(ii) of the Commission’s Rules of Practice. 
 

Tamman’s knowing conduct violates California Business and Professions Code § 6106 
providing for the disbarment or suspension of an attorney engaged in “[t]he commission of any act 
involving moral turpitude, dishonesty, or corruption . . . .” 

 
Tamman’s knowing conduct violates California Rules of Professional Conduct § 5-220 

which prohibits a member of the California Bar from “suppress[ing] any evidence that the member 
or the member’s client has a legal obligation to reveal or to produce.” 



 4

 
Tamman’s knowing conduct further violates 18 U.S.C. § 1519 which makes it a crime to 

“knowingly alter[], destroy[], mutilate[], conceal[], cover[] up, falsif[y], or make[] a false entry in 
any record, document, or tangible object with the intent to impede, obstruct, or influence the 
investigation or proper administration of any matter within the jurisdiction of any department or 
agency of the United States. . . .”  See also California Penal Code § 135 (making it a crime to 
destroy or conceal evidence to be produced in an investigation). 
 

III. 
 

In view of the allegations made by the Office of the General Counsel, the Commission 
deems it necessary and appropriate in the public interest that public administrative proceedings be 
instituted to determine: 

 
A. Whether the allegations set forth in Section II are true and, in connection therewith, 

to afford Tamman an opportunity to establish any defenses to such allegations; and  
 
B. What, if any, remedial action is appropriate in the public interest against Tamman 

pursuant to Section 4C of the Exchange Act and Rule 102(e) of the Commission’s Rules of 
Practice including, but not limited to, denying, temporarily or permanently, the privilege of 
appearing or practicing before the Commission.  

 
IV. 

 
IT IS ORDERED that a public hearing for the purpose of taking evidence on the questions 

set forth in Section III hereof shall be convened at a time and place to be fixed, and before an 
Administrative Law Judge to be designated by further order as provided by Rule 110 of the 
Commission's Rules of Practice, 17 C.F.R. § 201.110. 

 
IT IS FURTHER ORDERED that Tamman shall file an Answer to the allegations 

contained in this Order within twenty (20) days after service of this Order, as provided by Rule 220 
of the Commission's Rules of Practice, 17 C.F.R. § 201.220.  

 
If Tamman fails to file the directed answer, or fails to appear at a hearing after being duly 

notified, the Respondent may be deemed in default and the proceedings may be determined against 
him upon consideration of this Order, the allegations of which may be deemed to be true as 
provided by Rules 155(a), 220(f), 221(f) and 310 of the Commission's Rules of Practice, 17 C.F.R.  
§§ 201.155(a), 201.220(f), 201.221(f) and 201.310. 

 
This Order shall be served forthwith upon Respondent personally or by certified mail. 
 
IT IS FURTHER ORDERED that the Administrative Law Judge shall issue an initial 

decision no later than 300 days from the date of service of this Order, pursuant to Rule 360(a)(2) 
of the Commission’s Rules of Practice, 17 C.F.R. § 201.360(a)(2). 

 



 5

In the absence of an appropriate waiver, no officer or employee of the Commission 
engaged in the performance of investigative or prosecuting functions in this or any factually 
related proceeding will be permitted to participate or advise in the decision of this matter, except 
as witness or counsel in proceedings held pursuant to notice.  Since this proceeding is not “rule 
making” within the meaning of Section 551 of the Administrative Procedure Act, it is not deemed 
subject to the provisions of Section 553 delaying the effective date of any final Commission 
action. 

 
 By the Commission. 
 
 
 
        Elizabeth M. Murphy 
        Secretary 



 6

Service List 
 
 Rule 141 of the Commission's Rules of Practice provides that the Secretary, or another duly authorized 
officer of the Commission, shall serve a copy of the Order Instituting Administrative Proceedings Pursuant to Section 
4C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice ("Order"), on the 
Respondent and his legal agent. 
 
 The attached Order has been sent to the following parties and other persons entitled to notice: 
 
Honorable Brenda P. Murray    
Chief Administrative Law Judge   
Securities and Exchange Commission  
100 F Street, N.E. 
Washington, DC 20549-2557     
 
Christopher M. Bruckmann, Esq.     
Office of the General Counsel    
Securities and Exchange Commission   
100 F Street, N.E.  
Washington, DC 20549-9612 
 
Mr. David M. Tamman   
c/o Thomas Hanusik, Esq. 
Crowell & Moring LLP 
1001 Pennsylvania Avenue, N.W.   
Washington, DC 20004    

             
Thomas Hanusik, Esq.   
Crowell & Moring LLP 
1001 Pennsylvania Avenue, N.W.   
Washington, DC 20004   
(Counsel for David M. Tamman)