LOS ANGELES (CN) – The SEC wants an L.A.-based lawyer sanctioned for improper conduct. The SEC claims that David M. Tamman altered private placement memoranda to make it appear that much of the money raised by his client, NewPoint Securities, would be loaned to NewPoint principal John Farahi. The actual memoranda said the money would be used for real estate investment, but “the vast majority of money raised in the offerings was misappropriated by NewPoint’s principal John Farahi,” the SEC said.
The SEC Order Instituting Administrative Proceedings describes Tamman, 43, of Santa Monica, as “then a partner in the Los Angeles, California office of a large international law firm,” when the alleged machinations began, in March 2009.
According to the SEC Order: “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.” (Parentheses in Order.)
The SEC said in a statement announcing the Order: “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).”