Par For The Course

A disciplinary hearing is being conducted before a hearing committee of the Pennsylvania Disciplinary Board on charges relating to this announcement by the United States Securities and Exchange Commission

The Securities and Exchange Commission today announced settled charges against Philadelphia attorney John W. Pauciulo in connection with his role in the multi-million dollar unregistered, fraudulent offering of securities issued by Complete Business Solutions Group Inc. d/b/a Par Funding. The SEC previously charged Par Funding and others with operating a fraudulent scheme that raised nearly half a billion dollars from investors nationwide.

According to the SEC’s order, Pauciulo made material misstatements and omissions in private placement memoranda he prepared for many investment funds that offered and sold securities to raise money for Par Funding’s unregistered securities offering. The order alleges that Pauciulo also made material misstatements and omissions to prospective investors and investors in in-person meetings and video presentations. Among other things, Pauciulo misrepresented that the securities offerings did not need to be registered with the SEC and complied with the securities laws and failed to disclose that Par Funding’s undisclosed control person had a criminal history. According to the order, Pauciulo knew or was reckless in not knowing that there was no exemption from registration available.

Without admitting or denying the SEC’s findings, Pauciulo consented to an order finding that he violated the registration and antifraud provisions of Sections 5 and 17(a) of the Securities Act of 1933, and the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Pauciulo also agreed to pay a $125,000 civil penalty and consented to the imposition of a cease-and-desist order, and an order denying him the privilege of appearing or practicing before the SEC as an attorney, which includes the right to apply for reinstatement after five years.

Respondent

At all times relevant to this matter, 2016 through 2020, Respondent was a partner at the law firm of Eckert Seamans Cherin & Mellott (“Eckert Seamans”), and was the chair of the financial transactions practice group.

The pleadings in the case can be accessed here.

The hearing can only be viewed in real time. (Mike Frisch)