SEC v. MONROE L. BEACHY
SEC v. MONROE L. BEACHY, No. 5:11-cv-00320 (Feb. 15, 2011)
Exhibit of Monroe L. Beachy
summary
Monroe L. Beachy, a 77-year-old Ohio Amish man, defrauded over 2,600 investors of at least $33 million between 1986 and 2010 by falsely promising risk-free U.S. government investments, when he instead used funds for speculative ventures, fabricated account statements, and concealed massive losses, leading to SEC charges under the Securities Act and Exchange Act and his Chapter 7 bankruptcy with less than $18 million remaining.
paragraph
Monroe L. Beachy raised at least $33 million from more than 2,600 investors, mostly Amish, between 1986 and 2010 by falsely claiming their money would be invested in risk-free U.S. government securities. In reality, he diverted funds to speculative assets like junk bonds, stocks, and mutual funds, which incurred significant losses, leaving less than $18 million when he filed for Chapter 7 bankruptcy in June 2010. The SEC charged him with violations of Sections 5(a), 5(c), and 17(a)(1)-(3) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act for unregistered offerings, fraud, and intentional misrepresentations via fabricated monthly statements.
narrative
Monroe L. Beachy, a 77-year-old member of the Ohio Amish community, operated a multi-million-dollar fraud from 1986 to June 2010 under the fictitious name A&M Investments, raising at least $33 million from over 2,600 investors, the vast majority of whom were Amish. He deceived them by falsely promising their funds would be invested in safe, risk-free U.S. government securities, when in fact he used the money for speculative ventures including Ginnie Mae securities, high-yield bonds, mutual funds, and stocks. Beachy concealed massive losses by mailing investors monthly statements showing fabricated gains and never disclosed the true performance or nature of the investments, even as investor principal eroded. Many investors, treating the accounts like liquid money market funds, withdrew funds over time, which Beachy could no longer cover after years of losses. He provided only handwritten receipts and no formal financial disclosures, exploiting the trust and limited financial literacy of his community, including convincing older investors to recommend the scheme to their children. When Beachy filed for Chapter 7 bankruptcy in June 2010, less than $18 million remained of the $33 million collected. The SEC filed a civil complaint alleging violations of Sections 5(a), 5(c), and 17(a)(1)-(3) of the Securities Act and Section 10(b) and Rule 10b-5 of the Exchange Act, seeking a permanent injunction, civil penalties, and equitable relief to prevent further harm.
Classified affinity-fraud(confidence 90%). EDGAR detection: forms Form D· recall 58% / precision 2%. detection rule →
Statutes
15 U.S.C. § 78j(b)15 U.S.C. § 77v(a)15 U.S.C. § 78aa15 U.S.C. § 77e(a)15 U.S.C. § 77q(a)15 U.S.C. § 77t(d)15 U.S.C. § 78u(d)17 C.F.R. § 240.10b-5Sections 5(a), 5(c), and Section 17(a)(1), (2), and (3) of the Securities ActSections 5(a), 5(c), and Section 17(a)(1), (2), and (3) of the Securities ActSections 5(a), 5(c), and Section 17(a)(1), (2), and (3) of the Securities ActSections 5(a), 5(c), and Section 17(a)(1), (2), and (3) of the Securities ActSections 5(a), 5(c), and Section 17(a)(1), (2), and (3) of the Securities ActSections 5(a), 5(c), and Section 17(a)(1), (2), and (3) of the Securities ActSection 10(b) of the Securities Exchange ActSection 22(a) of the Securities ActSection 20(d) of the Securities ActRule 10b-5
Parties
Securities and Exchange CommissionMONROE L. BEACHY
Keywords
beachysecuritiesinvestorsinvestment contractssecurities exchangeinvestmentinterstate commercemoneyexchangesections securitiesmeans instrumentsinstruments transportationusecontractswhich
Extracted insights
Dollar amounts 2
- $33.00M $33 million $10M–$100M
- $18.00M $18 million $10M–$100M
Entities 2
- company a registered representative of h.d. vest advisory services inc.
- person monroe l. beachy
Triples 15
- Monroe L. Beachy operated a multi-million-dollar fraudulent offering scheme
- Monroe L. Beachy raised at least $33 million from more than 2,600 investors
- Monroe L. Beachy told investors that their money would be used to purchase risk-free U.S. government securities
- Monroe L. Beachy used investor money to make speculative investments
- Monroe L. Beachy failed to disclose that he had lied about how he was investing investor money
- Monroe L. Beachy failed to disclose that he had experienced significant losses on the underlying investments
- Monroe L. Beachy provided investors with monthly account statements showing fabricated gains
- Monroe L. Beachy violated Sections 5(a), 5(c), and 17(a)(1), (2), and (3) of the Securities Act of 1933
- Monroe L. Beachy violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
- Monroe L. Beachy transacted business in the Northern District of Ohio
- Monroe L. Beachy made use of means and instrumentalities of interstate commerce in connection with fraudulent activities
- Monroe L. Beachy was a registered representative of H.D. Vest Advisory Services Inc.
- Monroe L. Beachy terminated his registration with H.D. Vest Advisory Services Inc. in 2004
- Monroe L. Beachy raised more than $33 million from at least 2,600 investors from 29 states
- Monroe L. Beachy offered and sold securities in the form of investment contracts
Text layers
Extracted body text (13,092c)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
C.A. No.
v.
MONROE L. BEACHY,
Defendant.
COMPLAINT
Plaintiff, the United States Securities and Exchange Commission (the
“Commission”) alleges as follows:
INTRODUCTION
1. This case involves a multi-million-dollar fraudulent offering scheme
operated by Defendant Monroe L. Beachy (“Beachy”), a 77-year-old member of the Ohio
Amish community.
2. From as early as 1986 through June 2010, Beachy, doing business as
A&M Investments, raised at least $33 million from more than 2,600 investors through the
offer and sale of investment contracts. The vast majority of Beachy’s investors were
Amish. Beachy told the investors that their money would be used to purchase risk-free
U.S. government securities, which would generate returns for the investors.
3. In reality, Beachy used investor money to make speculative investments.
Until he filed for Chapter 7 bankruptcy in June 2010, Beachy never told his investors that
he had lied about how he was investing their money. Beachy also never told his
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investors that he had experienced significant losses on the underlying investments.
Beachy provided his investors with monthly account statements that showed fabricated
gains.
4. When Beachy filed for bankruptcy, less than $18 million remained from
approximately $33 million of investor money.
5. By engaging in this conduct, which is described more fully below, Beachy
violated Sections 5(a), 5(c), and Section 17(a)(1), (2), and (3) of the Securities Act of
1933 (“Securities Act”) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)(1), (2), and (3)], and
Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §
78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
JURISDICTION
6. This Court has jurisdiction over this action pursuant to Section 22(a) of
the Securities Act [15 U.S.C. § 77v(a)], and Sections 21(e) and 27 of the Exchange Act
[15 U.S.C. §§ 78u(e) and 78aa]. Venue is proper in this Court pursuant to Section 22(a)
of the Securities Act [15 U.S.C. § 77v(a)], and Section 27 of the Exchange Act [15
U.S.C. § 78aa].
7. Beachy transacted business in the Northern District of Ohio and the acts,
transactions, practices, and courses of business constituting the violations alleged herein
occurred within the jurisdiction of the United States District Court for the Northern
District of Ohio and elsewhere.
8. Beachy, directly and indirectly, has made use of the means and
instrumentalities of interstate commerce, the means and instruments of transportation and
communication in interstate commerce, and the mails, in connection with the acts,
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transactions, practices, and courses of business alleged herein.
DEFENDANT
9. Monroe L. Beachy is a 77-year-old resident of Sugarcreek, Ohio. Beachy
did business under the fictitious name of A&M Investments. Beachy was formerly a
registered representative of H.D. Vest Advisory Services Inc., but his registration was
voluntarily terminated in 2004.
FACTS
10. Beginning as early as 1986, Beachy, doing business as A&M Investments,
offered and sold securities in the form of investment contracts.
11. Beachy offered and sold investment contracts to his fellow Amish and to
others.
12. Beachy offered and sold investment contracts by himself. Beachy
maintained his own books and made all investment decisions on his own.
13. Beachy raised more than $33 million from at least 2,600 investors from 29
states, including Ohio.
14. If investors asked, Beachy told them that their money was going to be
used to purchase risk-free U.S. government securities, which would generate returns for
the investors.
15. Beachy enticed investors by promising interest rates greater than banks
were offering at the time.
16. Investors purchased investment contracts from Beachy by either hand-
delivering or mailing checks or cash to Beachy. At the time of the investment, Beachy
did not give his investors any documents regarding the investment other than a
3
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handwritten receipt showing the amount invested.
17. Beachy did not make financial statements available to his investors.
18. Many, if not most, of Beachy’s investors were not accredited investors.
19. Beachy mailed investors monthly statements showing, among other
things, the rate of return being earned and the overall account balance.
20. Many of Beachy’s investors treated their investment accounts with
Beachy like money market accounts. They believed their accounts were highly liquid,
and that they could withdraw their money at any time.
21. Because Beachy’s offer and sale of investment contracts continued for
such a long period of time, some members of the older generation of Amish investors
recommended to their children that they invest with Beachy. Amish children did in fact
purchase investment contracts from Beachy.
22. Beachy’s representations to investors that their money was being used to
purchase risk-free U.S. government securities were false. In reality, Beachy used
investor money to make speculative investments, including Ginnie Mae securities, high
yield (junk) bonds, mutual funds, and stocks.
23. Because Beachy’s investments were speculative, they lost money from
time to time. In fact, the speculative nature of the investments caused Beachy to lose
investor principal. During at least the last decade of Beachy’s scheme, based on the loss
of investor principal, Beachy would not have had the ability to meet redemptions if there
were a “run on the bank.”
24. Beachy’s representations on the investor monthly statements regarding the
rate of return being earned and the overall account balance were false.
4
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25. Beachy did not disclose his losses to investors. Instead, Beachy
maintained the charade that the investors were making money.
26. As of June 30, 2010, Beachy’s investors believed, based on the fabricated
monthly statements Beachy had sent them, that they had approximately $33 million
invested with Beachy. In reality, less than $18 million of investor money remained.
27. On June 30, 2010, Beachy filed for Chapter 7 bankruptcy. In his
bankruptcy schedules, he admitted that less than $18 million remained from
approximately $33 million of investor money.
COUNT I
Violations of Sections 5(a) and (c) of the Securities Act
[15 U.S.C. §§ 77e(a) and (c)]
28. Paragraphs 1 through 27 above are re-alleged and incorporated herein by
reference.
29. By his conduct, Beachy, directly or indirectly: (i) made use of means or
instruments of transportation or communication in interstate commerce or of the mails to
sell, through the use or medium of a prospectus or otherwise, securities as to which no
registration statement was in effect; (ii) for the purpose of sale or delivery after sale,
carried or caused to be carried through the mails or in interstate commerce, by any means
or instruments of transportation, securities as to which no registration statement was in
effect; and (iii) made use of the means or instruments of transportation or communication
in interstate commerce or of the mails to offer to sell or offer to buy, through the use or
medium of a prospectus or otherwise, securities as to which no registration statement had
been filed.
30. No valid registration statement was filed or was in effect with the
5
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Commission in connection with Beachy’s offer and sale of the investment contracts.
31. By reason of the foregoing, Beachy violated Sections 5(a) and (c) of the
Securities Act [15 U.S.C. § 77e(a) and (c)].
COUNT II
Violations of Section 17(a)(1) of the Securities Act
[15 U.S.C. § 77q(a)(1)]
32. Paragraphs 1 through 31 above are re-alleged and incorporated herein by
reference.
33. By his conduct, Beachy in the offer or sale of securities in the form of
investment contracts, by the use of the means or instruments of transportation or
communication in interstate commerce and by the use of the mails, directly or indirectly,
has employed devices, schemes or artifices to defraud.
34. Beachy acted with scienter.
35. By reason of the foregoing, Beachy violated Section 17(a)(1) of the
Securities Act [15 U.S.C. § 77q(a)(1)].
COUNT III
Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act
[15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)]
36. Paragraphs 1 through 35 above are re-alleged and incorporated herein by
reference.
37. By his conduct, Beachy, in the offer or sale of securities in the form of
investment contacts, by the use of the means or instruments of transportation and
communication in interstate commerce and by the use of the mails, directly or indirectly,
has obtained money or property by means of untrue statements of material fact or
omissions to state material facts necessary in order to make the statements made, in light
6
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of the circumstances under which they were made, not misleading; or has engaged in
transactions, practices or courses of business which have operated as a fraud or deceit
upon purchasers of securities from Beachy.
38. By reason of the foregoing, Beachy violated Sections 17(a)(2) and
17(a)(3) of the Securities Act [15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)].
COUNT IV
Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)]
and Rule 10b-5 Thereunder [17 C.F.R. § 240.10b-5]
39. Paragraphs 1 through 38 above are re-alleged and incorporated herein by
reference.
40. By his conduct, Beachy, in connection with the purchase or sale of
securities in the form of investment contracts, by the use of the means or instrumentalities
of interstate commerce or by the use of the mails, directly or indirectly: (a) employed
devices, schemes or artifices to defraud; (b) made untrue statements of material fact and
omitted to state material facts necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading; and (c) engaged
in acts, practices, or courses of business which operated as a fraud or deceit upon other
persons, including purchasers and sellers of such securities.
41. Beachy acted with scienter.
42. By reason of the foregoing, Beachy violated Section 10(b) of the
Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
7
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8
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court enter a judgment:
A. Permanently enjoining Beachy, his agents, servants, employees, attorneys,
and all persons in active concert or participation with them, and each of them, from
further violations of Sections 5(a), 5(c), 17(a)(1), (2), and (3) of the Securities Act [15
U.S.C. §§ 77e(a), 77e(c), and 77q(a)(1), (2), and (3)]; and Section 10(b) of the Exchange
Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];
B. Ordering Beachy to pay an appropriate civil monetary penalty pursuant to
Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the
Exchange Act [15 U.S.C. § 78u(d)(3)];
C. Retaining jurisdiction of this action in accordance with the principles of
equity and the Federal Rules of Civil Procedure in order to implement and to carry out
the terms of all orders and decrees that may be entered or to entertain any suitable
application or motion for additional relief within the jurisdiction of the Court; and
D. Granting such further relief as the Court may deem appropriate.
Respectfully Submitted,
/s/ Brian D. Fagel
Brian D. Fagel (Illinois Bar No. 6224886)
U.S. SECURITIES AND EXCHANGE COMMISSION
175 West Jackson Boulevard, Suite 900
Chicago, Illinois 60604
Telephone: (312) 886-0843
Facsimile: (312) 886-8514
E-mail: [email protected]
Attorney for Plaintiff, the U.S. Securities and Exchange
Commission
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UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
C.A. No.
v.
MONROE L. BEACHY,
Defendant.
COMPLAINT
Plaintiff, the United States Securities and Exchange Commission (the
“Commission”) alleges as follows:
INTRODUCTION
1. This case involves a multi-million-dollar fraudulent offering scheme
operated by Defendant Monroe L. Beachy (“Beachy”), a 77-year-old member of the Ohio
Amish community.
2. From as early as 1986 through June 2010, Beachy, doing business as
A&M Investments, raised at least $33 million from more than 2,600 investors through the
offer and sale of investment contracts. The vast majority of Beachy’s investors were
Amish. Beachy told the investors that their money would be used to purchase risk-free
U.S. government securities, which would generate returns for the investors.
3. In reality, Beachy used investor money to make speculative investments.
Until he filed for Chapter 7 bankruptcy in June 2010, Beachy never told his investors that
he had lied about how he was investing their money. Beachy also never told his
Case: 5:11-cv-00320 Doc #: 1 Filed: 02/15/11 1 of 8. PageID #: 1
investors that he had experienced significant losses on the underlying investments.
Beachy provided his investors with monthly account statements that showed fabricated
gains.
4. When Beachy filed for bankruptcy, less than $18 million remained from
approximately $33 million of investor money.
5. By engaging in this conduct, which is described more fully below, Beachy
violated Sections 5(a), 5(c), and Section 17(a)(1), (2), and (3) of the Securities Act of
1933 (“Securities Act”) [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)(1), (2), and (3)], and
Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §
78j(b)], and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
JURISDICTION
6. This Court has jurisdiction over this action pursuant to Section 22(a) of
the Securities Act [15 U.S.C. § 77v(a)], and Sections 21(e) and 27 of the Exchange Act
[15 U.S.C. §§ 78u(e) and 78aa]. Venue is proper in this Court pursuant to Section 22(a)
of the Securities Act [15 U.S.C. § 77v(a)], and Section 27 of the Exchange Act [15
U.S.C. § 78aa].
7. Beachy transacted business in the Northern District of Ohio and the acts,
transactions, practices, and courses of business constituting the violations alleged herein
occurred within the jurisdiction of the United States District Court for the Northern
District of Ohio and elsewhere.
8. Beachy, directly and indirectly, has made use of the means and
instrumentalities of interstate commerce, the means and instruments of transportation and
communication in interstate commerce, and the mails, in connection with the acts,
2
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transactions, practices, and courses of business alleged herein.
DEFENDANT
9. Monroe L. Beachy is a 77-year-old resident of Sugarcreek, Ohio. Beachy
did business under the fictitious name of A&M Investments. Beachy was formerly a
registered representative of H.D. Vest Advisory Services Inc., but his registration was
voluntarily terminated in 2004.
FACTS
10. Beginning as early as 1986, Beachy, doing business as A&M Investments,
offered and sold securities in the form of investment contracts.
11. Beachy offered and sold investment contracts to his fellow Amish and to
others.
12. Beachy offered and sold investment contracts by himself. Beachy
maintained his own books and made all investment decisions on his own.
13. Beachy raised more than $33 million from at least 2,600 investors from 29
states, including Ohio.
14. If investors asked, Beachy told them that their money was going to be
used to purchase risk-free U.S. government securities, which would generate returns for
the investors.
15. Beachy enticed investors by promising interest rates greater than banks
were offering at the time.
16. Investors purchased investment contracts from Beachy by either hand-
delivering or mailing checks or cash to Beachy. At the time of the investment, Beachy
did not give his investors any documents regarding the investment other than a
3
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handwritten receipt showing the amount invested.
17. Beachy did not make financial statements available to his investors.
18. Many, if not most, of Beachy’s investors were not accredited investors.
19. Beachy mailed investors monthly statements showing, among other
things, the rate of return being earned and the overall account balance.
20. Many of Beachy’s investors treated their investment accounts with
Beachy like money market accounts. They believed their accounts were highly liquid,
and that they could withdraw their money at any time.
21. Because Beachy’s offer and sale of investment contracts continued for
such a long period of time, some members of the older generation of Amish investors
recommended to their children that they invest with Beachy. Amish children did in fact
purchase investment contracts from Beachy.
22. Beachy’s representations to investors that their money was being used to
purchase risk-free U.S. government securities were false. In reality, Beachy used
investor money to make speculative investments, including Ginnie Mae securities, high
yield (junk) bonds, mutual funds, and stocks.
23. Because Beachy’s investments were speculative, they lost money from
time to time. In fact, the speculative nature of the investments caused Beachy to lose
investor principal. During at least the last decade of Beachy’s scheme, based on the loss
of investor principal, Beachy would not have had the ability to meet redemptions if there
were a “run on the bank.”
24. Beachy’s representations on the investor monthly statements regarding the
rate of return being earned and the overall account balance were false.
4
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25. Beachy did not disclose his losses to investors. Instead, Beachy
maintained the charade that the investors were making money.
26. As of June 30, 2010, Beachy’s investors believed, based on the fabricated
monthly statements Beachy had sent them, that they had approximately $33 million
invested with Beachy. In reality, less than $18 million of investor money remained.
27. On June 30, 2010, Beachy filed for Chapter 7 bankruptcy. In his
bankruptcy schedules, he admitted that less than $18 million remained from
approximately $33 million of investor money.
COUNT I
Violations of Sections 5(a) and (c) of the Securities Act
[15 U.S.C. §§ 77e(a) and (c)]
28. Paragraphs 1 through 27 above are re-alleged and incorporated herein by
reference.
29. By his conduct, Beachy, directly or indirectly: (i) made use of means or
instruments of transportation or communication in interstate commerce or of the mails to
sell, through the use or medium of a prospectus or otherwise, securities as to which no
registration statement was in effect; (ii) for the purpose of sale or delivery after sale,
carried or caused to be carried through the mails or in interstate commerce, by any means
or instruments of transportation, securities as to which no registration statement was in
effect; and (iii) made use of the means or instruments of transportation or communication
in interstate commerce or of the mails to offer to sell or offer to buy, through the use or
medium of a prospectus or otherwise, securities as to which no registration statement had
been filed.
30. No valid registration statement was filed or was in effect with the
5
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Commission in connection with Beachy’s offer and sale of the investment contracts.
31. By reason of the foregoing, Beachy violated Sections 5(a) and (c) of the
Securities Act [15 U.S.C. § 77e(a) and (c)].
COUNT II
Violations of Section 17(a)(1) of the Securities Act
[15 U.S.C. § 77q(a)(1)]
32. Paragraphs 1 through 31 above are re-alleged and incorporated herein by
reference.
33. By his conduct, Beachy in the offer or sale of securities in the form of
investment contracts, by the use of the means or instruments of transportation or
communication in interstate commerce and by the use of the mails, directly or indirectly,
has employed devices, schemes or artifices to defraud.
34. Beachy acted with scienter.
35. By reason of the foregoing, Beachy violated Section 17(a)(1) of the
Securities Act [15 U.S.C. § 77q(a)(1)].
COUNT III
Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act
[15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)]
36. Paragraphs 1 through 35 above are re-alleged and incorporated herein by
reference.
37. By his conduct, Beachy, in the offer or sale of securities in the form of
investment contacts, by the use of the means or instruments of transportation and
communication in interstate commerce and by the use of the mails, directly or indirectly,
has obtained money or property by means of untrue statements of material fact or
omissions to state material facts necessary in order to make the statements made, in light
6
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of the circumstances under which they were made, not misleading; or has engaged in
transactions, practices or courses of business which have operated as a fraud or deceit
upon purchasers of securities from Beachy.
38. By reason of the foregoing, Beachy violated Sections 17(a)(2) and
17(a)(3) of the Securities Act [15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)].
COUNT IV
Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)]
and Rule 10b-5 Thereunder [17 C.F.R. § 240.10b-5]
39. Paragraphs 1 through 38 above are re-alleged and incorporated herein by
reference.
40. By his conduct, Beachy, in connection with the purchase or sale of
securities in the form of investment contracts, by the use of the means or instrumentalities
of interstate commerce or by the use of the mails, directly or indirectly: (a) employed
devices, schemes or artifices to defraud; (b) made untrue statements of material fact and
omitted to state material facts necessary in order to make the statements made, in the
light of the circumstances under which they were made, not misleading; and (c) engaged
in acts, practices, or courses of business which operated as a fraud or deceit upon other
persons, including purchasers and sellers of such securities.
41. Beachy acted with scienter.
42. By reason of the foregoing, Beachy violated Section 10(b) of the
Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
7
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8
PRAYER FOR RELIEF
WHEREFORE, the Commission respectfully requests that the Court enter a judgment:
A. Permanently enjoining Beachy, his agents, servants, employees, attorneys,
and all persons in active concert or participation with them, and each of them, from
further violations of Sections 5(a), 5(c), 17(a)(1), (2), and (3) of the Securities Act [15
U.S.C. §§ 77e(a), 77e(c), and 77q(a)(1), (2), and (3)]; and Section 10(b) of the Exchange
Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5];
B. Ordering Beachy to pay an appropriate civil monetary penalty pursuant to
Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the
Exchange Act [15 U.S.C. § 78u(d)(3)];
C. Retaining jurisdiction of this action in accordance with the principles of
equity and the Federal Rules of Civil Procedure in order to implement and to carry out
the terms of all orders and decrees that may be entered or to entertain any suitable
application or motion for additional relief within the jurisdiction of the Court; and
D. Granting such further relief as the Court may deem appropriate.
Respectfully Submitted,
/s/ Brian D. Fagel
Brian D. Fagel (Illinois Bar No. 6224886)
U.S. SECURITIES AND EXCHANGE COMMISSION
175 West Jackson Boulevard, Suite 900
Chicago, Illinois 60604
Telephone: (312) 886-0843
Facsimile: (312) 886-8514
E-mail: [email protected]
Attorney for Plaintiff, the U.S. Securities and Exchange
Commission
Case: 5:11-cv-00320 Doc #: 1 Filed: 02/15/11 8 of 8. PageID #: 8
COMPLAINT
FACTS