|SEC suspends disbarred Mitton lawyer Hackman
Securities and Exchange Commission
SEC suspends disbarred Mitton lawyer Hackman
2002-09-12 11:19 PT - Street Wire
by Brent Mudry
Las Vegas penny stock lawyer Shawn F. Hackman, whose career highlights include writing bogus share opinion letters for notorious Canadian career fraudster Michael Mitton's H & R Enterprises, has been suspended by the United States Securities and Exchange Commission. The SEC suspension, handled by the regulator's Salt Lake City office and announced Wednesday, is based on Mr. Hackman's disbarment by the Supreme Court of Nevada.
Mr. Hackman is the third Las Vegas-linked penny stock attorney in the past 11 months to destroy his career related to dubious penny stock dealings on Howe Street, the centre of dealings for the former Vancouver Stock Exchange. Herbert Jacobi of New York, who helped Mr. Mitton wire illicit proceeds to Panama in the H & R rig job, pleaded guilty last October to buying stolen FBI records for Mafia-linked client Robert Potter. In an unrelated case, Max C. Tanner of Las Vegas was convicted by a federal jury last November of securities fraud conspiracy and money laundering, stemming from his offshore trading through controversial Vancouver brokerage Pacific International Securities in the Maid Aide boiler room penny stock rig job in 1998 and 1999.
While staff with the Nevada State Bar were unable to immediately confirm or comment on Mr. Hackman's plight, records with the Supreme Court of Nevada show the dirty Las Vegas lawyer was ordered disbarred on April 3. Mr. Hackman had been temporarily suspended by the state court on Dec. 4, 2001, on the request of the state bar's Southern Nevada Disciplinary Board.
Mr. Hackman was disbarred for misappropriating more than $700,000 in client funds at a time when he was ostensibly co-operating with state bar counsel regarding other client complaints of misappropriation. (All figures are in U.S. dollars.) "We conclude that the documents before us demonstrate that Hackman poses a substantial threat of serious harm, and that his immediate temporary suspension is warranted," stated the court in its initial order.
Mr. Hackman was a key professional in the H & R debacle. (The Mitton ring's fraudulent OTC Bulletin Board promotion of H & R caused the collapse of a small upstate New York brokerage, Saperston Financial, in September, 1997, and left the clearing house unit of global mutual fund giant Fidelity Management, National Financial Services, with a $9.6-million loss.)
"Hackman was a primary participant in the manipulation scheme and facilitated the manipulation by arranging for the manipulators to reap huge profits from their scheme," stated National Financial lawsuit filed U.S. District Court for the Southern District of Florida in September, 1997, and amended a year later.
The Fidelity unit alleged that Mr. Hackman, who had served as H & R's counsel, prepared and provided false opinion letters to help the Mitton ring clear large issuances of H & R shares in July and August, 1997. "Hackman falsely opined that the shares ... which were newly issued to the manipulators so they could sell them into the manipulated market, were exempt from registration under the United States' federal securities laws and could be issued by a transfer agent without a restrictive legend," stated National Financial.
Barely a month after the last Hackman-assisted share issuance, and with an additional two million H & R subsequently issued to Mr. Mitton's associates, H & R shares peaked and collapsed, taking Saperston, the unfortunate New York brokerage, under with it.
While these H & R fraud allegations date back four or five years, Nevada's bar took no disciplinary action, or at least no serious action, against Mr. Hackman. (Numerous new revelations about the H & R fiasco are expected when the British Columbia Securities Commission starts a hearing on the matter. A scheduling update is set for Dec. 2, with Mr. Mitton and Canaccord Capital broker Brad Scharfe as star local defendants.)
Instead, the state bar tackled Mr. Hackman amid a criminal investigation for misappropriation of client funds several years after H & R. Documents filed in court by the bar itself confirm it had serious concerns about Mr. Hackman dating back to at least August, 1999, 14 months before he met his latest alleged victim, who is now at least $700,000 poorer.