United States Securities and Exchange Commission

Litigation Release No. 17275 / December 17, 2001

United States v. Patrick H. McCarthy III, Criminal No. 01760 (E. D. Pa. December 13, 2001)

PATRICK H. MCCARTHY, III CHARGED CRIMINALLY
WITH OBSTRUCTION OF PROCEEDINGS BEFORE THE COMMISSION

On December 13, 2001, the United States Attorney's Office for the Eastern District of Pennsylvania announced the filing of a one-count information against Patrick H. McCarthy III, a former partner at a Philadelphia law firm, charging him with obstruction of proceedings before the Securities and Exchange Commission in violation of 18 U.S.C. § 1505. McCarthy is charged with destroying, altering and concealing documents after receiving a subpoena issued in a Commission investigation that involved, among other things, two Commonwealth of Pennsylvania refunding bond offerings. McCarthy is also charged with concealing the extent of his involvement in the two transactions during his investigative testimony under oath before the Commission staff. If convicted, McCarthy faces a maximum sentence of 5 years imprisonment, a three year period of supervised release, $250,000 fine and a $100 special assessment.

In November 1999, the Commission filed a civil injunctive action against McCarthy, charging him with violations of the antifraud provisions of the federal securities laws. McCarthy, a fund raiser and advisor to a former Pennsylvania State Treasurer, was charged with arranging for his law firm to receive undisclosed compensation for influencing the selection of a securities dealer in the two Pennsylvania refunding bond offerings. Without admitting or denying the allegations in the Commission's complaint, McCarthy agreed to the entry of an injunction against future violations and paid a civil penalty of $100,000. SEC v. Patrick H. McCarthy, Litigation Release No. 16356 (November 17, 1999).