SEC v. South Bay Acquisitions, LLC; and John N. Matson, No. LR-26064, Southern District of California (July 31, 2024) — Press Release
raw: South Bay Acquisitions, LLC, et al.
South Bay Acquisitions, LLC, et al., No. 3:24-cv-01342 (July 31, 2024)
summary
The SEC charged John N. Matson and South Bay Acquisitions, LLC with operating a Ponzi scheme that defrauded five investors of over $1.5 million.
paragraph
John N. Matson and South Bay Acquisitions, LLC are charged with conducting unregistered offerings of 'LLC Bonds' to raise more than $1.5 million from five investors. The SEC alleges the defendants violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. The commission is seeking permanent injunctions, disgorgement of ill-gotten gains, and civil penalties.
narrative
The SEC has charged South Bay Acquisitions, LLC and its principal, John N. Matson, with orchestrating a Ponzi scheme between January 2012 and September 2021. Matson, a former registered representative, allegedly issued unregistered 'LLC Bonds' to five investors, promising to manage the proceeds as a fiduciary. Instead, the SEC alleges Matson diverted funds to his personal account for personal expenses and used new investor capital to pay returns to earlier participants. The complaint was filed in the U.S. District Court for the Southern District of California. The defendants face charges for violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. The SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties.
Classified ponzi(confidence 100%). EDGAR detection: forms Form D· recall 35% / precision 15%. detection rule →
Parties
Securities and Exchange CommissionJohn N. MatsonSouth Bay Acquisitions, LLC
Keywords
southbaysecurities exchangesecuritiesmatsonexchange commissionmatson southllcinvestorsacquisitionsexchangeseccommission southponzi schemecommission
Exhibits & Attached Documents (1)
Extracted insights
Dollar amounts 1
- $1.50M $1.5 million $1M–$10M
Entities 6
- scheme_term california holding company and its organizer in alleged ponzi scheme
- agency sec’s complaint
- agency Securities and Exchange Commission
- person south bay
- agency the sec’s investigation
- company unregistered offerings of securities
Triples 13
- U.S. SECURITIES AND EXCHANGE COMMISSION Charges California Holding Company and its Organizer in Alleged Ponzi Scheme
- SEC charged South Bay Acquisitions, LLC and its principal, John N. Matson of San Diego, California
- Matson and South Bay defrauded five investors, including some of his former brokerage customers
- Matson and South Bay made unregistered offerings of securities
- Matson and South Bay raised more than $1.5 million from five individual investors
- Matson issued LLC Bonds from South Bay to the investors
- Matson and South Bay transferred money from South Bay or otherwise diverted South Bay funds to Matson’s personal account for personal expenses
- South Bay operated as a Ponzi scheme in which investor funds were used to pay promised returns to earlier investors
- SEC’s complaint charges Matson and South Bay with violating Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder
- The complaint seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties
- The SEC’s investigation was conducted by enforcement staff in the Atlanta Regional Office
- The investigation was led by Kyle Bradley and supervised by Natalie Brunson and Justin Jeffries
- The litigation will be led by William Hicks and supervised by M. Graham Loomis
PDF (from attached: complaint)
Text layers
Extracted body text (2,043c)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26064 / July 31, 2024 Securities and Exchange Commission v. South Bay Acquisitions, LLC, et al., No. 3:24-cv-01342-H-KSC (S.D. Cal. filed July 30, 2024) SEC Charges California Holding Company and its Organizer in Alleged Ponzi Scheme The Securities and Exchange Commission today charged South Bay Acquisitions, LLC (“South Bay”) and its principal, John N. Matson of San Diego, California, with defrauding five investors, including some of his former brokerage customers. According to the SEC’s complaint, between January 2012 and September 2021, Matson and South Bay – which was purportedly formed to seek out investment opportunities – made unregistered offerings of securities and raised more than $1.5 million from five individual investors. The complaint alleges that Matson, a former registered representative, issued “LLC Bonds” from South Bay to the investors and promised to manage the proceeds as a fiduciary for the investors’ benefit. According to the complaint, despite those promises, Matson and South Bay instead consistently transferred money from South Bay or otherwise diverted South Bay funds to Matson’s personal account for personal expenses. The complaint alleges that South Bay also operated as a Ponzi scheme in which investor funds were used to pay promised returns to earlier investors. The SEC’s complaint, filed in the United States District Court for the Southern District of California, charges Matson and South Bay with violating Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties. The SEC’s investigation was conducted by enforcement staff in the Atlanta Regional Office. The investigation was led by Kyle Bradley and supervised by Natalie Brunson and Justin Jeffries. The litigation will be led by William Hicks and supervised by M. Graham Loomis.
OCR text (2,043c · html-text · 99% conf)
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26064 / July 31, 2024 Securities and Exchange Commission v. South Bay Acquisitions, LLC, et al., No. 3:24-cv-01342-H-KSC (S.D. Cal. filed July 30, 2024) SEC Charges California Holding Company and its Organizer in Alleged Ponzi Scheme The Securities and Exchange Commission today charged South Bay Acquisitions, LLC (“South Bay”) and its principal, John N. Matson of San Diego, California, with defrauding five investors, including some of his former brokerage customers. According to the SEC’s complaint, between January 2012 and September 2021, Matson and South Bay – which was purportedly formed to seek out investment opportunities – made unregistered offerings of securities and raised more than $1.5 million from five individual investors. The complaint alleges that Matson, a former registered representative, issued “LLC Bonds” from South Bay to the investors and promised to manage the proceeds as a fiduciary for the investors’ benefit. According to the complaint, despite those promises, Matson and South Bay instead consistently transferred money from South Bay or otherwise diverted South Bay funds to Matson’s personal account for personal expenses. The complaint alleges that South Bay also operated as a Ponzi scheme in which investor funds were used to pay promised returns to earlier investors. The SEC’s complaint, filed in the United States District Court for the Southern District of California, charges Matson and South Bay with violating Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties. The SEC’s investigation was conducted by enforcement staff in the Atlanta Regional Office. The investigation was led by Kyle Bradley and supervised by Natalie Brunson and Justin Jeffries. The litigation will be led by William Hicks and supervised by M. Graham Loomis.