U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 25973 / April 11, 2024
Securities and Exchange Commission v. Zachary J. Horwitz, et al, No. 2:21-cv-02927 (C.D. Cal., filed Apr. 5, 2021)
SEC Obtains Final Judgment Against Zachary Horwitz in Connection With a $690 Million Ponzi Scheme
On February 14, 2024, the Securities and Exchange Commission obtained a final judgment against Zachary Horwitz, who the SEC charged with an alleged Ponzi scheme that raised over $690 million.
The complaint alleged that Horwitz falsely claimed to have a track record of successfully selling movie rights to Netflix and HBO when, in fact, he had never sold any movie rights to, or done any business with, HBO or Netflix. Horwitz allegedly showed investors fabricated agreements and emails regarding the purported deals with HBO and Netflix. The complaint alleged that Horwitz promised investors returns in excess of 35%, and for many years paid supposed returns on earlier investments using funds from new investments. The complaint further alleged that Horwitz misappropriated investor funds for his personal use, including the purchase of his multi-million dollar home, trips to Las Vegas, and to pay a celebrity interior designer.
The Court entered a final judgment permanently enjoining Horwitz from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Horwitz was also ordered to pay disgorgement of $62,847,901.05, representing net profits gained as a result of the conduct alleged in the complaint, together with prejudgment interest thereon in the amount of $11,375,011.28, but that disgorgement figure and prejudgment interest were deemed satisfied by the restitution order entered in the parallel criminal action United States v. Zachary J. Horwitz, Crim. No. CR 21-214-MCS (C.D. Cal.), requiring Defendant to pay $230,361,884 to his victims.
The SEC’s litigation was led by Kathryn Wanner and supervised by Douglas M. Miller, and the investigation was conducted by Spencer Bendell and Lorraine Pearson.