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Lawyer Tossed From NY Bar After Stock Fraud

(CN) - A New York appeals court disbarred a lawyer who was convicted of 30 felony counts relating to a securities fraud scheme.

Though based in Cleveland, James Warren Margulies practiced law in the Empire State since 1994.

Margulies was convicted of participating in a "pump-and-dump" scheme between 2004 and 2008, in which he and a co-conspirator inflated the stock price of Industrial Enterprises of America before selling off nearly worthless shares to investors.

These actions destroyed the value of the company and drove it into bankruptcy, according to the New York Supreme Court's Appellate Division.

Margulies was convicted in July 2011 of conspiracy, grand larceny, scheme to defraud, violation of business law and falsifying business records.

He was sentenced to 7 to 21 years in prison and ordered to pay $7 million in restitution.

"Since respondent was convicted of felonies in a court of this state, he was automatically disbarred upon his conviction," the unsigned opinion states.

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