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SEC Blows Whistle on Dynamic Duo

MANHATTAN (CN) - The SEC claims a two-man firm based in the Bronx bilked investors for $1 million by promising 22 percent returns on unregistered securities. The agency sued William Vassell, Robert Goldstein and Murdoch Security & Investigations, in Federal Court.

The SEC says Vassell, Murdoch's CEO, and Goldstein, its senior vice president, "orchestrated MSI's offering," and placed ads promising 22 percent annual returns in The Wall Street Journal, Barron's and Investor's Business Daily.

Vassell pitched the notes to suckers who responded to the ads, and Goldstein provided them "with a wide array of false and otherwise misleading information in an effort to sell the 22 percent notes," the SEC says in its complaint.

"Speaking for MSI, as one of the company's only two senior officers, Goldstein made numerous statements of material facts to potential and actual investors that he knew, or was reckless in not knowing, were false at the time he made those statements," the complaint states. "Goldstein also omitted information necessary to prevent his affirmative statements from being misleading. Among Goldstein's - and, by imputation, MSI's - misrepresentations were false statements about the company's revenues, existing assets and overseas operations."

The SEC seeks disgorgement, an injunction and civil penalties for violations of the Securities and Exchange Act.

Goldstein, 73, of New York City, was "the primary salesperson," for CEO Vassell, 53, of Connecticut, according to the complaint.

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