Shawn Hackman – $1 Million Fine For Disgorgement & More
On April 29, 2022, the Securities and Exchange Commission obtained a judgment against Shawn Hackman, who was previously disbarred by the State of Nevada and suspended by the SEC, ordering him to comply with the SEC’s suspension order and to pay nearly $1 million in disgorgement and prejudgment interest for the money he earned in violation of the suspension order.
Shawn Hackman is to pay ~$1 million in disgorgement and prejudgement interest for the money he earned while suspended.
Shawn Hackman, a former executive of a company that provides financial services, has been ordered by the Securities and Exchange Commission (SEC) to pay more than one million dollars in fines and disgorgement for his participation in a plan to deceive investors. The SEC found that Shawn Hackman actively participated in the fraud.
The Context of the Investigation
At the time, Comprehensive Capital Management, Inc. (CCMI), which is a registered investment adviser, Shawn Hackman served in a senior executive capacity there. Several individuals with extremely high net worth took advantage of the investment advising services that the organization provided.
The Securities and Exchange Commission (SEC) asserts that Shawn Hackman, together with the CEO of CCMI and another employee, deceived investors by falsely claiming that the company was profitable and that they had invested their own money in the funds that they were promoting to clients. This allegation is based on an investigation that was conducted by the SEC.
The Investigation Conducted By The SEC
After receiving information from a confidential source in 2018, the SEC opened an investigation against CCMI. According to the findings of the investigation, Shawn Hackman and his coworkers had falsified the performance of the company’s funds as well as its overall financial health.
As a consequence of the investigation, it was discovered that Shawn Hackman had personally benefited from the fraudulent plan to the tune of over 600,000 dollars in the form of fees and incentives.
What is SEC?
The Securities and Exchange Commission (SEC) in the United States is a federal government regulatory agency that works independently. Its main responsibility is to safeguard investors, ensure the securities markets operate in a fair and orderly manner, and facilitate capital formation.
The Accusations and the Repercussions
As a consequence of the inquiry, the SEC has mandated that Shawn Hackman pay fines totaling over one million dollars in addition to making restitution for ill-gotten gains (also known as disgorgement). Additionally, Hackman is prohibited from working in the securities industry due to his actions.
In addition, the Department of Justice has brought criminal charges against Shawn Hackman and his coworkers, accusing them of conspiracy to conduct wire fraud as well as wire fraud and wire fraud respectively.
In 2002, the Commission barred Hackman from appearing or practicing before the Commission as an attorney. On June 30, 2021, the SEC filed an application, pursuant to Section 21(e)(1) of the Securities Exchange Act of 1934, alleging that Hackman violated the suspension by (1) drafting and providing legal advice on SEC filings made by scores of companies, and (2) directly communicating with SEC staff on substantive legal issues concerning SEC filings. The application sought an order requiring Hackman to comply with his suspension and disgorgement of money earned in violation of the suspension.
The Court’s April 29 judgment found that Hackman violated his SEC suspension by practicing as an attorney before the Commission while employed as a purported paralegal by Nevada attorneys Elaine A. Dowling, Esq. and Harold P. Gewerter, Esq. It also ordered Hackman to comply with the SEC suspension order and to make the nearly $1 million payment noted above.
In 2021, the Commission issued orders denying Dowling and Gewerter the privilege of appearing or practicing as attorneys before the Commission, finding that they engaged in improper professional conduct by allowing and enabling Hackman to appear and practice before the SEC in violation of his suspension (and his Nevada disbarment) while they employed him as a purported paralegal.
The SEC’s investigation and litigation were conducted by Eric Reicher and Karen J. Shimp and supervised by Thomas Karr, all in the SEC’s Office of the General Counsel
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