Frank D. Gruttadauria et al.

On February 2, 2009, the Court in SEC v. Gruttadauria entered an Order regarding the distribution of approximately $3.55 million to victims of Frank D. Gruttadauria’s Ponzi-like scheme, and appointed Rust Consulting, Inc. as the Distribution Agent and Damasco & Associates, LLP as Tax Administrator. According to the Complaint, Gruttadauria concealed his fraud by, among other things, sending falsified account statements and other documents to customers that misrepresented the activities and holdings in their accounts.

Under the Distribution Plan, the money collected by the SEC will be distributed by establishing tiers, the grouping of which will be based upon the account value(s) contained in the customers’ final falsified account statements. Within each tier, each account will receive the same compensation, regardless of the represented account value. As a result, all customers having an account affected by the fraud will receive some compensation from the Distribution Plan. You can read copies of the Court’s first Order on the Distribution Plan and Order approving the Distribution Plan.

On or about April 15, 2009, letters were mailed to the victims of Gruttadauria’s fraud, along with copies of their final, falsified account statements. If the account statement attached to the letter is a copy of the same statement the investor originally received, the investor need do nothing further to participate in the distribution.

If you have questions regarding the distribution, you can contact Patti Ernste with Rust Consulting, Inc. by calling (507) 333-4311 or sending an email to pernste@rustconsulting.com.