Matthew A. Krimm, et al.

Litigation Release No. 24519 / June 27, 2019

Securities and Exchange Commission v. Matthew A. Krimm, et al., Civil Action No. 1:17-CV-464

On May 28, 2019, the U.S. District Court for the District of Delaware entered default judgments against Matthew A. Krimm and Krimm Financial Services, LLC (“KFS”), ordering Krimm and KFS to pay approximately $2 million in disgorgement and civil penalties and permanently enjoining them from violating the federal securities laws at issue.

The SEC’s Complaint, filed on April 25, 2017, charged Krimm and KFS with fraudulently inducing at least 25 investors to invest more than $1.69 million in an unregistered offering of promissory notes. According to the Complaint, Krimm and KFS falsely claimed that they owned and operated their own highly successful mortgage loan business when, in fact, Krimm and KFS operated no mortgage lending business of their own. The Complaint further stated that Krimm and KFS used over 75% of the money from new investors to pay Krimm’s personal expenses and to make Ponzi-like payments to prior investors. The Complaint alleged that Krimm and KFS violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 (“Securities Act”) and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as the securities registration provisions in Sections 5(a) and 5(c) of the Securities Act.

U.S. District Judge Robert D. Mariani, sitting by designation in the District of Delaware, entered the final judgments, which order that Krimm and KFS are jointly and severally liable for $913,537 in disgorgement, $161,277 in prejudgment interest, and a civil penalty in the amount of $913,537. The final judgments resolve this litigation in its entirety.

In a parallel criminal action brought by the Delaware Department of Justice, Krimm pleaded guilty to two counts of securities fraud and three counts of theft. He is awaiting sentencing.

The SEC’s investigation was conducted by Patricia A. Kuzma Trujillo and Kingdon Kase of the Philadelphia Regional Office. The case is currently supervised by Kelly L. Gibson. The litigation was led by Julia C. Green and is currently supervised by Jennifer C. Barry. The SEC appreciates the assistance of the Investor Protection Unit of the Delaware Department of Justice.

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