Church Contributes Funds For Investors In SEC Suit

The Securities and Exchange Commission last week announced a settlement in a securities fraud case filed in Massachusetts involving a unique cooperative effort between a church and government enforcement authorities. In 2001, Eric Resteiner sold $22 million in fictitious securities, defrauding at least 50 investors, many of whom were members of the Christian Science Church. In earlier litigation, the SEC obtained disgorgement of $700,000 from one of Resteiner's co-defendants. Under the securities laws, this will be used to partially compensate Resteiner's victims. Now, the First Church of Christ Scientist in Boston has agreed to donate an additional $2.3 million to the disgorgement fund so that victims can be more adequately compensated. Section 308(b) of the Sarbanes-Oxley Act permits the SEC to accept gifts to a disgorgement fund for eventual distribution to defrauded investors. This is the first time that such a donation has been made since the enactment of Sarbanes-Oxley in 2002.