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USDOJ_ US Attorney's Office - Eastern District of Texas PRESS RELEASE

USDOJ_ US Attorney's Office - Eastern District of Texas PRESS RELEASE

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Published by: Michael Lindenberger on Sep 06, 2013
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9/6/13USDOJ: US Attorney's Office - Eastern District of Texaswww.justice.gov/usao/txe/News/2012/edtx-barasch-011312.html1/2
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FOR IMMEDIATE RELEASEJanuary 13, 2012
Home» News Room» Press Release
Department of Justice
Office of Public Affairs
FORMER SEC HEAD OF ENFORCEMENT FOR THE FOR T WORTHOFFICE SETTLES CONFLICT OF INTER EST ALLEGA TIONS
PLANO, Texas – Spencer Barasch, 54, of Dallas, and the U.S. Attorney’s Office for the Northern Districtof Texas have entered into a settlement agreement today resolving federal conflict of interest allegationsarising from Barasch’s representation of Stanford Financial Group, announced Eastern District of TexasU.S. Attorney John M. Bales. Barasch has agreed to pay a fine of $50,000, which is themaximum civilfine amount for a violation of 18 U.S.C. ' 207. According to the settlement agreement, Barasch served as the Headof Enforcement fortheFort Worth Re
 
gional Officeof theSecurities and Exchan
 
geCommission from approximately 1998 through April2005. As Head of Enforcement, Barasch was responsible for the re view, oversight, and approval of matters under investigation. It is alleged that during Barasch’s tenure, Stanford FinancialGroup madefalse material representations and omissions of material fact to numerous investors that caused significantfinancial losses to those investors. It is alleged that Barasch had substantial participation with theStanford Financial Group investigation while at the SEC: specificall y, it is alleged that in ugust 1998,Barasch directed a preliminary SEC investigation into the activitiesof Stanford FinancialGroup to beclosed; that in December 2002, Barasch declined a referral from his examination staff to investigate the activities of Stanf ord Financial Group; and thatin fall 2003, Barasch declined to openan investigation into the activities of Stanford Financial Group. Barasch subsequently left the SEC for private practice in April2005.Notwithstanding his supervisory position at the SEC and oversight of the investigation of StanfordFinancialGroup, which restricted him from future private representation of Stanford Financ
 
ial Group before the SEC, as well as his having been verbally informed that he was unable to represent StanfordFinancial Group due to a permanent conflict of interest, it is alleged that Barasch represented StanfordFinancial Group in connection with SEC proceedings between September 29, 2006, and December 18,2006, and made, with the intent to influence, a communication to the SEC. Despite his efforts, Baraschdid not obtain any confidential information from the SEC.Barasch has denied any allegations of wrongdoing.In assessing the settlement agreement, U.S. Attorney Bales announced that: “We are committed toensuring that former federal government attorneys and employees adhere to the rigorous ethicalstandards imposed upon them by law. In this instance, the SEC ethics program worked and Barasch’smisguided attempt to represent Stanford Financial Group had no lasting consequence. Even so, theremust be zero tolerance for ethical missteps. Today’s settlement agreement demonstrates that we will holdthose that shirk their professional responsibilities accountable for their conduct.”This case was investigated by special agents with the FBI with the assistance of the Securities andExchange Commission. The settlement was negotiated by Assistant U.S. Attorneys Shamoil T.Shipchandler and L. Frank Coan, Jr. with the U.S. Attorney’s Office for the Eastern District of Texas on behalf of the U.S. Attorney’s Office for the Northern District of Texas.Return to Top
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