Frank Russo and the Amended Complaint
The original complaint against Frank Russo did not include the as a defendant the "California Company" which Russo and his companies allegedly transferred their investors money to. As I previously discussed, it was relatively easy to determine who this company was, Frank Russo had an interest in Veritasiti doing buisness as Media Data Corporation. On June 28, 2006, the SEC its amended complaint to include Veritasiti and obtained injunctive relief against the new corporate defendant.
The SEC's announcement is here and alleges "Russo diverted at least $11.5 million in investor funds to Veritasiti, which Russo formed with a college acquaintance. The amended complaint further alleges that Russo was Veritasiti's chief financial officer and that he was one of two directors. According to the amended complaint, Russo did not disclose the purported investment in Veritasiti to investors in the limited partnerships. To the contrary, the complaint alleges that he sent false and misleading account statements to investors reporting fictional returns in excess of 10% and making false statements concerning the investment strategies of the limited partnerships. The amended complaint alleges that Veritasiti has no legitimate claim to the funds and that it was unjustly enriched by its receipt of those funds. The amended complaint seeks disgorgement of those amounts plus prejudgment interest." (my emphasis)
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