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United States Securities and Exchange Commission v. Glick

United States District Court, N.D. Illinois, Eastern Division

June 14, 2019

UNITED STATES SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
DANIEL H. GLICK and FINANCIAL MANAGEMENT STRATEGIES INC., Defendants, and GLICK ACCOUNTING SERVICES INC., EDWARD H. FORTE, and DAVID B. SLAGTER, Relief Defendants.

          Jeffrey A. Shank Michelle Muñoz Durk U.S. Securities and Exchange Commission Attorneys for Plaintiff U.S. Securities and Exchange Commission

          SECURITIES AND EXCHANGE COMMISSION'S MOTION FOR ENTRY OF FINAL JUDGMENT AGAINST RELIEF DEFENDANT DAVID SLAGTER

          HON. VIRGINIA M. KENDALL.

         The SEC respectfully moves for the entry of final judgment against relief defendant David Slagter. In a nutshell, the SEC and Slagter have reached a settlement that will require Slagter to pay hundreds of thousands of dollars. Those funds - $362, 486, to be exact - will provide meaningful, much-needed relief to injured investors.

         The proposed settlement also will bring this case to a close. This Court has already entered judgment against all of the other defendants and relief defendants.

         In support of this motion, the SEC states as follows:

1. The SEC filed this action on an emergency basis on March 23, 2017. The Complaint alleged that Daniel Glick perpetrated a multi-million-dollar fraud against his clients, many of whom were elderly. He took advantage of senior citizens who entrusted him with their retirement savings.
2. The United States later charged Glick with wire fraud, and he eventually pleaded guilty. Judge Gettleman ultimately sentenced Glick to 151 months in prison, and ordered him to pay more than $5.2 million in restitution. See United States v. Glick, 17-cr-739 (N.D. Ill) (Dckt. No. 40) (Judgment in a Criminal Case). This Court later entered judgment against Glick and his companies, too. See Dckt. Nos. 137 - 139.
3. The SEC also brought claims against David Slagter and Edward Forte. The Complaint alleged that they were relief defendants, meaning that they received the fruits of Glick's fraud. “Collectively, Forte and Slagter received more than $1.5 million from Glick. The money that Forte and Slagter received is substantially traceable to the funds that Glick received from investors.” See Cplt., at ¶ 8; see also Id. at Count IV.
4. This Court entered a default judgment against Edward Forte for his repeated failure to comply with this Court's deadlines. The judgment against Forte totals $1, 044, 270. See Dckt. No. 151.
5. The SEC has now reached a settlement with Slagter, the last remaining party. The SEC respectfully submits the Consent of Relief Defendant David Slagter (Ex. 1), as well as the proposed final judgment (Ex. 2).
6. The proposed final judgment requires Slagter to pay $362, 486. Slagter will pay $336, 249 within 10 days, and will pay the remaining $26, 237 within 360 days. The settlement amount ($362, 486) is equal to an inheritance that Slagter recently received from a deceased relative. See 4/3/19 Tr., at 9-10; see also Dckt. No. 166 (discussing the inheritance).
7. The proposed final judgment also includes a financial waiver for Slagter, given his financial condition as represented in sworn financial statements. Specifically, the proposed final judgment provides that Slagter is liable for disgorgement of ill-gotten gains in the amount of $611, 064, and prejudgment interest thereon in the amount of $107, 855, for a total of $718, 919. But based on the representations made by Slagter in sworn financial statements, payment of all but $362, 486 is waived due to inability to pay.
8. The waiver depends on the truthfulness and accuracy of Slagter's sworn financial statements. Slagter has agreed that the SEC may petition the Court for an order requiring him to pay the unpaid portion of the judgment (that is, $356, 433, which is $718, 919 minus $362, 486) if it learns that his representations were fraudulent, misleading, inaccurate, or incomplete in any material respect.
9. Slagter will pay the funds to the SEC, which will hold the funds for the time being. The proposed final judgment provides that the SEC may propose a plan to distribute the funds to the victims, subject to the Court's approval. See Proposed Final Judgment, at 4-5. SEC counsel expect to confer with the victims and work with the SEC's Office of Distributions to propose a ...

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