Friday, June 15, 2012

SEC Litigation Releases: Week in Review

By Tim Husson, PhD

Promoters of Convicted Ponzi Scheme Operator Jeffrey L. Mowen Ordered to Pay Over $20 Million in Disgorgement and Civil Penalties,  June 13, 2012, (Litigation Release No. 22393).

The US District Court for the District of Utah granted the SEC's motion for entry of final judgment against Defendants Michael W. Averett, Michael G. Butcher, Thomas R. Fry, Gary W. Hansen, James B. Mooring, and Bevan J. Wilde, who allegedly "acted as promoters...through the unregistered offer and sale of high-yield promissory notes" for the Ponzi scheme operated by Jeffrey L. Mowen from October 2006 to October 2008.  Mr. Mowen pled guilty in December 2011 to charges related to the scheme and is currently serving a 10 year prison sentence.  The disgorgement and civil penalties for the Defendants ranged from approximately $331,000 (Butcher) to over $17 million (Fry).  Also, the District Court granted in part the SEC's motion for summary judgment against Defendant David G. Bartholomew "for acting as an unregistered broker-dealer" in the scheme.

SEC Charges 14 Sales Agents In $415 Million Long Island-Based Ponzi Scheme, June 12, 2012, (Litigation Release No. 22391).

According to the complaint (link opens PDF), the Defendants were sales agents for Agape World, Inc., which allegedly issued "fictitious" securities from 2005 to January 2009.  The Defendants allegedly made knowing misrepresentations to investors about the securities--which were not registered with the SEC--and Agape.  Agape's former President, Nicholas J. Cosmo, was arrested in 2009 and later sentenced to 300 months in prison and ordered to pay more than $179 million in restitution for organizing the scheme (see SEC News Release 2012-112).

SEC Charges Atlanta Investment Advisor and its Owner for Misappropriating Client Funds, June 11, 2012, (Litigation Release No. 22390)

The SEC charged Benjamin Daniel DeHaan and Lighthouse Financial Partners, LLC, with "mov[ing] approximately $1.2 million in funds belonging to his clients from their accounts at a custodial broker-dealer into a bank account in Lighthouse’s name that he controlled, thus gaining custody and control of these client assets."  At least half of these funds, which were ostensibly transferred to open new accounts at another broker-dealer, remain missing.  The SEC also alleges that DeHaan provided them and the State of Georgia with false documents.  The civil action was filed in the United States District Court for the Northern District of Georgia.  On June 11, Judge Thomas W. Thrash issued a preliminary injunction against DeHaan and Lighthouse.

No comments:

Post a Comment

Please keep comments appropriate. Malicious comments or solicitations will be removed.