The SEC case against me was based on the testimony of a convicted securities crook

In the period 1971 to 1975, the SEC brought a series of SEC enforcement actions against me. One result of this was my victory over the SEC in the United States Supreme Court in the case of SEC v. Sloan, 436 US 103 (1978).

However, in the meantime, the SEC obtained two injunctions against me and barred me from the securities business. The main case was reported as SEC vs. Samuel H. Sloan, 369 F. Supp. 996 (SDNY 1974).

I appealed, but by unfair tactics the SEC got my appeals dismissed, so my appeals were never heard. I had spent a lot of time working on my appeals and had been able to establish in my briefs that none of the findings or the trial court were supported by any evidence at all, much less substantial evidence. Nevertheless, I was never able to get my appeals heard.

The only allegation against me was that I had failed to maintain adequate books and records. These were civil suits. I was never charged with a crime. I was never charged with fraud or misappropriation of any kind. I never had any customer accounts. I never went bankrupt, and all my trades were good. I did not owe a dime to anybody.

I have always believed that the SEC sued me because of my young age. I was only 26 when the SEC filed its first lawsuit against me. They did not believe that a man as young as I could be running a successful securities business by myself. I was a market maker in over-the-counter securities. They thought that I must be a front for somebody, perhaps a front for organized crime.

Anybody who knows me now, 30 years later, knows that I am by nature an independent operator and I could never be a front for anybody.

The SEC's cases against me were based almost entirely on the testimony of one man, Sheldon G. Kanoff, who was an SEC staff investigator at the time. Today, I learned a startling fact about my case. What I learned today was that later on Sheldon G. Kanoff was himself convicted of securities fraud and served time in federal prison.

You can see this yourself on the United States Bureau of Prisons website, which I just discovered today. Go to http://inmateloc.bop.gov/locatordocs/IDSearchPage.jsp.

Now, search for inmate number 13227-050

You will see my man, Sheldon G. Kanoff, age 67, release date 7/14/93.

Now, look at the actual decision at 369 F. Supp. 996. You will see that it is based almost entirely on the testimony of Sheldon G. Kanoff.

Sheldon G. Kanoff was not the only witness for the SEC, but virtually all of the allegations were based on his testimony. The only other witness was Arthur Bruder, an elderly man who visited my office for just one week in January 1971 and who died shortly after testifying. He had no qualifications.

I had often complained to the SEC staff about Kanoff. I repeatedly told them that Kanoff was lying. I demanded that they send another investigator. However, they refused to do so and kept sending Kanoff again and again.

Another thing that bothered me was that Kanoff was totally unqualified. Kanoff was not an accountant. Kanoff was not even a bookkeeper. Kanoff had probably never been to college. Kanoff might not even have graduated from high school. Kanoff had no experience whatever working in the securities industry.

How could a man like this with no background or qualifications for anything, come into my office, take a quick cursory glance at my books and records (which is all that Kanoff ever actually did) and decide that they were not adequately maintained.

I was very unhappy about the trial. To prove that my books and records really were adequately maintained, thereby disproving the testimony of Sheldon Kanoff, I brought my entire ledgers, books and records and offered them in evidence at the trial. I could see that Judge Robert J. Ward never glanced at them. He just accepted the testimony of Kanoff as true. However, to preserve the record, I left my original books and records as evidence in the case and all those books and records are still in the federal repository in New Jersey. I have always hoped that somebody will go back and look at those books and records and realize that I was correct.

I have always said that Sheldon G. Kanoff was a liar and a fraud. Now that it is established that Kanoff was later convicted of securities fraud, I feel that the SECfs case against me should be reopened. Also, the SEC should have informed me and the other victims that Kanoff was a convicted securities crook, so they are participants in this fraud.

I feel that these cases should be reopened. The injunction obtained by the SEC against me in 1974 should be lifted and the order barring me from the securities business dated 1975 should be lifted. Also, the SEC should be required to pay me several million or billion dollars in money damages for keeping me out of the securities business for the past 28 years.

The SEC is clearly at fault in this. Back in 1971 when this case was going on, I told them to send another securities investigator besides Kanoff, because that other investigator would readily see that there was nothing wrong with my books and records. The SEC refused to comply with this reasonable request.

Re-opening a 28 year old court case is not an easy matter. I would appreciate any guidance and suggestions in this regard.

Sam Sloan


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