All information in this report was compiled from public records maintained by the SEC.
Defrauding Investors with Penny Stocks to Cover Interest Payments
Murray A. Huberfield, 62, of Lawrence, New York, Moshe aka “Mark” Feuer, 54, of Lawrence, New York, and Scott A. Taylor, 45, of New York, New York, on July 31 entered into an offer of settlement for an SEC order for allegedly defrauding investors and failing to supervise management activities properly.
From 2013 through at least 2016, Feuer and Taylor were executive officers of entities of Beechwood, a reinsurance and investment advisory company substantially owned by Murray Huberfield and Mark Nordlicht. They also held ownership interests in Platinum Partners, with interests in several private funds managed by Platinum and portfolio companies of those funds. Beechwood clients were advised to invest additional assets in non-Platinum investments, some offered as penny stocks, in which Huberfield had personal interests.
Huberfield, Feuer, and Taylor did not tell Beechwood clients the conflicts created by these transactions, according to the SEC. The trio helped Beechwood invest clients’ money in Platinum portfolio companies and funds to help Platinum cover interest payments and skirt default on existing investments. As a result, Beechwood clients’ funds were used to serve debt already owed to them.
Additionally, Huberfield and another individual with regulatory and criminal histories held significant roles at Beechwood, the SEC said. Feuer and Taylor also failed to supervise Beechwood’s initial chief investment officer, who participated in a fraudulent bondholder consent solicitation and caused Beechwood to vote its clients’ bonds in favor of it.
The SEC said Huberfield agreed to a collateral industry bar and to pay $1,464,242 in disgorgement, $224,065 in prejudgment interest, and a civil money penalty of $180,000. Feuer agreed to pay $389,707 in disgorgement, $44,037 in prejudgment interest, and a civil money penalty of $125,000. Taylor agreed to pay a disgorgement of $344,586, prejudgment interest of $42,658.63, and a civil money penalty of $100,000.