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'Playboy Broker' Could Be Headed To Jail
Business Brokerage By H. Bernstein - editor, StockPatrol
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Forex Broker Playboy broker and one-time political candidate Daniel Rubin is charged with orchestrating a "pump and dump" scheme of Marx Toys & Entertainment Group and The Classica Group.
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Agency Brokerage Spark A man the press calls the "playboy broker" could be headed to jail. Daniel Rubin, and three other men have been charged with securities fraud for their roles in a "pump and dump" scheme that manipulated shares of two tiny public companies - Marx Toys & Entertainment Group and The Classica Group.
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Business Broker Authorities say that Rubin, CEO of Rubin Investment Group, acquired shares of the two companies at a discount, and engaged in manipulative practices to falsely inflate their value. His efforts apparently bore fruit. Classica stock spiked on August 27th, rising from 51 cents to $1.34 a share, before settling back to $1 a share. Marx stock opened at 7 cents on September 18th, and moved to 15 cents before closing at 14 cents a share.Rubin did his best to cultivate his image as a millionaire playboy, with a website (www.danrubin.com) that featured a photo of him standing next to a Lamborghini, and highlighted his appearances on national television as an "eligible bachelor." Both the photograph, and those references now have disappeared from the website.
Brokerage Account Also arrested were Andrew Saska, a Rubin employee; Robert Lomonaco, who has been CEO of Marx Toys for less than one month; and Scott Halperin, Classica's current Chairman and CEO.
Stock Broker Authorities allege that Rubin and his cohorts schemed to manipulate Classica stock by transferring 1.8 million Classica shares to Rubin's firm, Rubin Investment Group, and then registering those shares on August 27, 2003, on a Form S-8 Registration Statement. The SEC says that those shares were not issued in exchange for consulting services, as Rubin and Classica claimed, but in order to compensate Rubin and Saska for manipulating the price of Classica shares.
Brokerage Online Stock Trading Similarly, Rubin allegedly received shares of Marx Toys in return for his efforts to manipulate Marx shares. According to the SEC, in late August 2003, Marx entered into a purported Investment Banking Agreement with Rubin Investment Group in exchange for 6.8 million shares of Marx common stock. On August 29th, Marx Toys filed a Form S-8 Registration Statement, registering 8 million shares, including 6.8 million shares issued to Rubin Investment Group and another 1.2 million shares issued to Classica's CEO Halperin. The SEC charges that Marx's CEO, Lomonaco, agreed to pay Halperin a kickback in exchange for having procured Rubin Investment Group's "investment" in Marx.
Broker Justin Ticket Lomonaco is not the only Marx executive to run afoul of regulators in recent days. On September 5, 2003, the SEC charged that Steven Wise (who at the time was Marx's CEO and sole director) and Larry Vindman, a New Jersey stock promoter, engaged in fraudulent and manipulative practices to inflate the value of Marx stock. The SEC said that Wise and Vindman gave 100,000 shares of Marx common stock to two stockbrokers in order to induce them to solicit customers who would buy Marx shares at inflated prices.
Real Estate Brokerage Rubin recently moved to Lake Helen, Florida, where he reportedly bought a legal referral business, 1-800 LAWYER. He recently attempted to run for Mayor of Lake Helen, but dropped out of the race after questions were raised about his status as a registered Florida voter.And Rubin has a history of association with highly touted, underperforming companies. His firm, Rubin Investment Group, acted as investor relations counsel to Infotopia, Inc. (Pink Sheets: IFTA), a failed infomercial company that failed to meet its over-hyped projections. See Update: Infotopia, Inc. - Another Sad Chapter.
Commodity Broker Rubin, who was released on $1 million bail, faces a possible 25 year prison sentence on charges of securities fraud.
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