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Attorney General and New Jersey Division of Consumer Affairs Announce $940,000 Bureau of Securities Settlement with Livingston-Based North Jersey Investment Adviser

TheAlternativePress.com Staff

Thursday, October 11, 2012 • 10:56am

LIVINGSTON, NJ - Jacob and Blanche Eisenstark of Livingston and Jacob Einsenstark's two Livingston-based investment companies have settled with the Bureau of Securities, according to Attorney General Jeffrey S. Chiesa and the New Jersey Division of Consumer Affairs.  As part of the settlement, Jacob Eisenstark admitted to defrauding investors out of $850,000 by diverting invested funds for his family's personal expenses by making inappropriate investments.

Under the Final Judgment and Consent Order, the Eisenstarks and Jacob Eisenstark’s firms, Eisenstark Advisory Inc. and J.N.J. Capital Management Inc., are required to pay $940,000, consisting of $850,000 in consumer restitution and a $90,000 civil monetary penalty.  Jacob Eisenstark and the firms also consented to a permanent bar from the securities industry in New Jersey.

"Jacob Eisenstark convinced victims, including senior citizens, to part with their hard-earned savings, with the false promise of a 15 percent rate of return – only to then misuse their money to pay mortgages and other personal expenses," Attorney General Jeffrey S. Chiesa said.   "Fraud schemes like this leave victims with pain and heartache and little else.  Through this action, we've shut down the defendant's operation and taken a significant step toward providing restitution to victims."

In the settlement, Jacob Eisenstark admitted that he violated the New Jersey Uniform Securities Law by, among other things, misleading some investors with the claim that he managed a fictitious fund consisting of at least $15 million in assets, and that they would earn a 15 percent annual return, by investing in the fund.  He further misled some investors by giving them monthly “interest distribution payments” that they believed were from the interest earned by their investments.  Nearly all of those “interest distributions” were fictitious, because most were taken from the investors’ own principal investments.

Jacob Eisenstark further admitted that he used invested funds for the family’s personal expenses, including mortgage payments on residential properties in Livingston and in Palm Harbor, Florida, and fees for a residence purchased by the Eisenstarks’ daughters in West Orange.

"As a result of our lawsuit, this defendant is stopped from using deceit and lies to line his pockets with investors' money,” Eric T. Kanefsky. Acting Director of the New Jersey Division of Consumer Affairs, said.  “Our Bureau of Securities remains vigilant in investigating financial fraud and protecting the hard-earned assets of investors."

“Investors who believe they are victims in a fraudulent scheme should file a complaint with us. The Bureau has investigators who will check into filed complaints and take swift action when there’s fraud,” said Abbe R. Tiger, Chief of the N.J. Bureau of Securities.

 

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