William Nolan, who was fined almost $200,000 by the Securities and Exchange Commission in 1999 for defrauding investors, now faces potential jail time for failing to pay the penalty.
The SEC has filed a “contempt of court” action against Nolan and ordered him to fork over the fee immediately or face more drastic penalties, The Post has learned.
Meanwhile, eight of the original investors in W.J. Nolan & Co. are suing him personally, saying he systematically siphoned money from the company and spent it on himself or relatives.
When he sold the firm to Gruntal for a reported $750,000, he allegedly kept all the money. Gruntal has subsequently been sold to Ryan Beck & Co.
The eight investors, who originally put $1.2 million into the company, have sued for $6 million. They are represented by Alan Baron of Dorsey & Whitney, who was unavailable for comment.
The lawsuit alleges Nolan drew expenses of $200,000 per year from the company, which he used for ordinary living expenses, including the rent on his Manhattan apartment.
The investors are also suing several members of Nolan’s family – his mother, two sisters, a niece, some cousins and two aunts – who are alleged to have received a total of $700,000 from the firm’s payroll, even though they never worked for the company. Nolan has filed a motion to dismiss the suit against the family members, claiming they were unaware of what he was doing.
The law firm defending Nolan in the investor civil suit – Winget, Spadafora & Schwartzberg – declined comment.