Federal court and regulatory record
SEC Fraud Judgment
A federal court entered judgment against Roy Dekel for securities fraud in December 2016. An SEC administrative law judge barred him from the securities industry in July 2017.
$3,281,776.55
United States District Court for the Central District of California, No. 8:15-cv-01746-PA-KES[Final J.]
The case
The Securities and Exchange Commission filed suit on October 28, 2015 against Diverse Financial Corp., Roy Dekel, and David Kandell in the United States District Court for the Central District of California, No. 8:15-cv-01746-PA-KES. The agency announced the filing in Litigation Release LR-23396.[LR-23396]
The SEC alleged that the defendants raised approximately $3.29 million from at least 16 investors through promissory notes issued by DF Capital Partners, LLC; that investors were told the funds would be used for premium-finance lending or short-term cash investments; and that the funds were instead diverted to Diverse Financial’s operating expenses, including Dekel’s salary, with Ponzi-like payments made to earlier investors.[LR-23396]
Summary judgment
The court granted summary judgment for the SEC on November 3, 2016.[SJ Order]
The judgment
| Component | Amount |
|---|---|
| Disgorgement (joint and several with Diverse Financial)[Final J.] | $2,717,758.20 |
| Prejudgment interest[Final J.] | $108,023.57 |
| Civil penalty[Final J.] | $455,994.78 |
| Total[Final J.] | $3,281,776.55 |
The judgment was entered on December 8, 2016 by Judge Percy Anderson, on Dekel’s consent, and was due within 14 days. It imposed permanent injunctions against future violations of Section 10(b) of the Securities Exchange Act and Rule 10b-5, and of Section 17(a) of the Securities Act.[Final J.]
The admission
Paragraph V of the judgment recites:
“solely for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. §523, the allegations in the complaint are true and admitted by Defendant”
Section 523(a)(19) makes a judgment for securities fraud non-dischargeable in bankruptcy.
The industry bar
In the Matter of Roy Dekel, Admin. Proc. File No. 3-17751. Initial Decision Release No. 1157, issued July 28, 2017 by Administrative Law Judge Carol Fox Foelak, barred him from the securities industry.[ID-1157]
The initial decision was re-adopted in Initial Decision Release No. 1298, issued November 7, 2018 by Administrative Law Judge James E. Grimes, after Lucia v. SEC prompted reassignment.[ID-1298]
Status of the judgment
Case chronology
- October 28, 2015SEC files suitAdjudicated
SEC v. Diverse Financial Corp., Roy Dekel, and David Kandell, No. 8:15-cv-01746-PA-KES (C.D. Cal.). Announced in Litigation Release LR-23396.
- 2015Bankruptcy filingsAdjudicated
Dekel and three Diverse Financial subsidiaries — DF Capital Partners, DF Real Estate Partners, and DF Insurance Services — filed for bankruptcy, as did Dekel personally.
- November 3, 2016Summary judgment granted for the SECAdjudicated
- December 8, 2016Final judgment entered: $3,281,776.55Adjudicated
Entered by Judge Percy Anderson on Dekel’s consent. Due within 14 days.
- July 28, 2017Barred from the securities industryAdjudicated
Initial Decision Release No. 1157, ALJ Carol Fox Foelak, Admin. Proc. File No. 3-17751.
- November 7, 2018Initial decision re-adoptedAdjudicated
Initial Decision Release No. 1298, ALJ James E. Grimes, after Lucia v. SEC prompted reassignment.
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