SEC v. William E. Lyons, No. LR-18674, Eastern District of Virginia — Press Release
raw: William E. Lyons
William E. Lyons, No. LR-18674
William E. Lyons committed securities fraud by falsely offering a $200 million nonexistent foreign bank guarantee, claiming it would yield $220 million in a year, to Bear Stearns and three other institutions, and was permanently enjoined from future violations and fined $25,000 after consenting to judgment without admitting or denying the allegations.
The SEC charged William E. Lyons with securities fraud for offering a fraudulent $200 million foreign bank guarantee, falsely promising a $220 million return in one year, to Bear Stearns and three other financial institutions. Lyons, operating through the unregistered SV Group, provided fabricated documentation obtained from European sources and failed to conduct any independent due diligence despite his financial industry experience. He violated Section 17(a) of the Securities Act and Section 15(a) of the Exchange Act by acting as an unregistered broker-dealer, and consented to a permanent injunction and a $25,000 civil penalty without admitting or denying the allegations.
William E. Lyons committed securities fraud by offering a nonexistent $200 million foreign bank guarantee to Bear Stearns and three other financial institutions, falsely claiming it would be worth $220 million one year after purchase. Operating through the unregistered SV Group, Lyons provided fabricated documentation sourced from a network of European individuals and entities, despite having no legitimate basis for the investment. He failed to conduct any independent inquiry into the purported bank guarantees or the parties involved, even though he had significant experience in the financial services industry. The SEC alleged that Lyons violated Section 17(a) of the Securities Act of 1933 by making material misrepresentations and Section 15(a) of the Securities Exchange Act of 1934 by acting as an unregistered broker-dealer. The investment opportunity did not exist, and SV Group was never registered with the SEC or NASD. Without admitting or denying the allegations, Lyons consented to a final judgment that permanently enjoins him from future violations of these securities laws and imposes a $25,000 civil penalty. The case is part of the SEC’s broader efforts to combat so-called 'prime bank' fraud schemes.
Extracted insights
- $220.00M $220 million $100M–$1B
- $200.00M $200 million $100M–$1B
- $25K $25,000 $10K–$100K
- organization The Commission
- William E. Lyons offered to sell Bear Stearns & Co. and three other financial institutions a fraudulent foreign bank guarantee for $200 million
- William E. Lyons claimed the foreign bank guarantee would be worth $220 million in one year
- The Commission filed a securities fraud lawsuit against William E. Lyons in the United States District Court for the Eastern District of Virginia
- The defendant consented to the entry of a final judgment that permanently enjoins him from future violations of Section 17(a) of the Securities Act
The Commission announced today that it has filed a securities fraud lawsuit in the United States District Court for the Eastern District of Virginia charging William E. Lyons (Lyons) with offering to sell Bear Stearns & Co. (Bear Stearns) and three other financial institutions a fraudulent foreign bank guarantee for $200 million that Lyons claimed would be worth $220 million in one year. Without admitting or denying the allegations in the Commission's complaint, the defendant consented to the entry of a final judgment that permanently enjoins Lyons from future violations of Section 17(a) of the Securities Act of 1933 and Section 15(a) of the Securities Exchange Act of 1934, and imposes a $25,000 monetary penalty on Lyons. The Commission's complaint alleges that in September 2002, Lyons, operating through SV Group, approached a senior managing director at Bear Stearns - where Lyons had previously been employed as a broker - to sell Bear Stearns a purported "zero coupon bank guarantee note" for $200 million, saying it would be worth $220 million one year after its purchase. Lyons provided Bear Stearns with documentation describing the purported bank guarantee and the transaction that Lyons claimed he and his associates would coordinate in order for Bear Stearns to obtain a bank guarantee issued by a third party. Lyons had obtained the offering materials and other information that he provided to Bear Stearns from a network of individuals and entities located in Europe. Despite significant training and experience in the financial services industry, Lyons failed to conduct any type of independent inquiry into the purported bank guarantees or into the individuals and entities that claimed that they could furnish them. In fact, the investment opportunity that Lyons offered to Bear Stearns did not exist. The Commission's complaint further alleges that during the time that Lyons, through SV Group, were offering the bank guarantee to Bear Stearns and the three other financial institutions, SV Group was not registered with the SEC or the NASD as a broker-dealer and Lyons was associated with an unregistered broker-dealer. For more information about prime bank frauds, visit the SEC's "Prime Bank Information Center" at http://www.sec.gov/divisions/enforce/primebank.shtml. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml. SEC Complaint in this matter
The Commission announced today that it has filed a securities fraud lawsuit in the United States District Court for the Eastern District of Virginia charging William E. Lyons (Lyons) with offering to sell Bear Stearns & Co. (Bear Stearns) and three other financial institutions a fraudulent foreign bank guarantee for $200 million that Lyons claimed would be worth $220 million in one year. Without admitting or denying the allegations in the Commission's complaint, the defendant consented to the entry of a final judgment that permanently enjoins Lyons from future violations of Section 17(a) of the Securities Act of 1933 and Section 15(a) of the Securities Exchange Act of 1934, and imposes a $25,000 monetary penalty on Lyons. The Commission's complaint alleges that in September 2002, Lyons, operating through SV Group, approached a senior managing director at Bear Stearns - where Lyons had previously been employed as a broker - to sell Bear Stearns a purported "zero coupon bank guarantee note" for $200 million, saying it would be worth $220 million one year after its purchase. Lyons provided Bear Stearns with documentation describing the purported bank guarantee and the transaction that Lyons claimed he and his associates would coordinate in order for Bear Stearns to obtain a bank guarantee issued by a third party. Lyons had obtained the offering materials and other information that he provided to Bear Stearns from a network of individuals and entities located in Europe. Despite significant training and experience in the financial services industry, Lyons failed to conduct any type of independent inquiry into the purported bank guarantees or into the individuals and entities that claimed that they could furnish them. In fact, the investment opportunity that Lyons offered to Bear Stearns did not exist. The Commission's complaint further alleges that during the time that Lyons, through SV Group, were offering the bank guarantee to Bear Stearns and the three other financial institutions, SV Group was not registered with the SEC or the NASD as a broker-dealer and Lyons was associated with an unregistered broker-dealer. For more information about prime bank frauds, visit the SEC's "Prime Bank Information Center" at http://www.sec.gov/divisions/enforce/primebank.shtml. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml. SEC Complaint in this matter