The Securities and Exchange Commission filed a federal lawsuit last week against Tom Dudchik, a former state representative and current owner of CTCapitolReport.com. The lawsuit alleges that Dudchik failed to pay back a portion of his “ill-gotten gains” from the 2004 sale of unregistered stock in a non-lethal weapon company.
Dudchik, of East Haddam, declined to comment on the lawsuit filed by U.S. Attorney John Hughes. Dudchik’s website is a popular destination that aggregates political news from around Connecticut. He has appeared this year as an analyst on several political radio and television programs. He was deputy commissioner for the state Department of Environmental Protection during Gov. Lowell P. Weicker’s administration. From 1984 to 1986, Dudchik served a term as a state representative for Ansonia and Derby.
The government alleges that Dudchik received 345,000 shares of Stinger Systems in 2004 without paying compensation, and then sold the “unregistered” shares for $865,935 over a two-week period in November of the same year.
An administrative law judge concluded that Dudchik had violated the registration provisions of the Securities Act of 1933. Click here to read the original decision.
“The initial decision also concluded that Dudchik had profited from his illegal actions in the amount of $865,935,” the new lawsuit says. “Dudchik claimed an inability to pay the money back and submitted a sworn financial affidavit to the Administrative Law Judge.”
The judge then reduced Dudchik’s payment obligation from $865,935 to $50,000. The affidavit is sealed, so it is not clear why the judge agreed to reduce the repayment obligation.
Last week’s SEC lawsuit alleges that Dudchik has “failed to pay the required amounts,” but it is not clear how much of the $50,000 he still owes.