Steven Hoffenberg, the former chairman and chief executive officer of the New York-based healthcare receivables financing company Towers Financial Corp., has agreed to pay $60 million to settle civil fraud charges brought by the Securities and Exchange Commission.
Under the settlement, Mr. Hoffenberg will be barred from becoming an officer or director in any other public company. The SEC said that, according to terms of the agreement, Mr. Hoffenberg would not admit to any wrongdoing.
In February 1993, the SEC charged Mr. Hoffenberg and others associated with Towers with defrauding investors through the sale of unregistered securities, misrepresenting the company's financial condition and misusing proceeds from the investments.
It's estimated that investors lost more than $500 million through the activities of the now-defunct company.
According to reports published last week, Mr. Hoffenberg also has agreed to settle a lawsuit brought by the trustee in Towers' bankruptcy proceeding for $516 million, pending confirmation by a federal bankruptcy judge.
Meanwhile, Mr. Hoffenberg still faces criminal charges in New York and Chicago. In New York, he was charged with securities fraud and obstruction of justice in connection with the SEC investigation. In Chicago, he faces charges of squandering $3 million in funds from two defunct insurance companies.