SEC v. K2 Unlimited, Inc.; and Diane Glatfelter, No. LR-23199, District of Massachusetts (Feb. 18, 2015) — Press Release
raw: K2 Unlimited, Inc.
K2 Unlimited, Inc., No. 1:11-cv-11649 (Feb. 18, 2015)
Diane Glatfelter, president of K2 Unlimited, Inc
Diane Glatfelter, president of K2 Unlimited, Inc., is accused of orchestrating a securities fraud scheme involving "bank guarantees" that defrauded investors of over $2.2 million. The alleged scheme promised high returns with guarantees against loss, but the bank guarantees were fictional and the trading programs non-existent. Glatfelter and K2 Unlimited, Inc. consented to a final judgment, which imposed a permanent injunction against future securities law violations and barred Glatfelter from serving as an officer or director of a publicly-traded company. Glatfelter was also held liable for disgorgement of $340,369.77, which was deemed satisfied by a prior restitution order of $1.575 million in a related criminal case.
Diane Glatfelter, president of K2 Unlimited, Inc., is accused of orchestrating a securities fraud scheme involving "bank guarantees" that defrauded investors of over $2.2 million. The alleged scheme promised high returns with guarantees against loss, but the bank guarantees were fictional and the trading programs non-existent. Glatfelter and K2 Unlimited, Inc. consented to a final judgment, which imposed a permanent injunction against future securities law violations and barred Glatfelter from serving as an officer or director of a publicly-traded company. Glatfelter was also held liable for disgorgement of $340,369.77, which was deemed satisfied by a prior restitution order of $1.575 million in a related criminal case. The U.S. Securities and Exchange Commission (SEC) obtained a final judgment against Diane Glatfelter and her company K2 Unlimited, Inc. for orchestrating a securities fraud scheme involving fictitious “bank guarantee” investments that promised high, risk-free returns. Between 2007 and 2009, Glatfelter and co-defendants defrauded investors of at least $2.2 million by selling non-existent trading programs tied to fabricated financial instruments, while falsely claiming her legitimacy through association with a public company. Glatfelter was ordered to disgorge $340,369.77—deemed satisfied by a prior $1.575 million criminal restitution order—and permanently barred from serving as an officer or director of a public company, while K2 was enjoined from future securities violations. The SEC’s case concluded with prior judgments against co-defendants Robert Rice ($525,896.51 in penalties) and Robert Anderson (over $2.3 million in disgorgement and penalties), while 211 Ventures, LLC was also defaulted against. The scheme exemplified a classic “prime bank” fraud, with the SEC warning investors to avoid similar fraudulent banking-related investment schemes. The U.S. Securities and Exchange Commission (SEC) obtained a final judgment against Diane Glatfelter and her company K2 Unlimited, Inc. for orchestrating a securities fraud scheme involving fictitious “bank guarantee” investments that promised high, risk-free returns. Between 2007 and 2009, Glatfelter, along with co-defendants Robert Rice and Robert Anderson, defrauded investors of at least $2.2 million by selling non-existent trading programs based on fabricated financial instruments. Glatfelter was ordered to disgorge $340,369.77—deemed satisfied by a prior criminal restitution order of $1.575 million following her conviction on four counts of wire fraud and a 30-month prison sentence. The final judgment permanently enjoins Glatfelter and K2 from future securities law violations and bars Glatfelter from serving as an officer or director of a public company. The SEC’s case concluded with prior judgments against co-defendants, totaling over $2.8 million in disgorgement, penalties, and interest.
Exhibits & Attached Documents (1)
Extracted insights
- $2.30M $2.3 million $1M–$10M
- $1.80M $1.8 million $1M–$10M
- $1.57M $1.575 million $1M–$10M
- $526K $525,896 $100K–$1M
- $425K $425,000 $100K–$1M
- $340K $340,369 $100K–$1M
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
- Securities and Exchange Commission obtained final judgments against Diane Glatfelter and K2 Unlimited, Inc. for bogus 'Bank Guarantee' investment scams
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23199 / February 18, 2015 Securities and Exchange Commission v. K2 Unlimited, Inc., Civil Action No. 1:11-cv-11649 SEC Obtains Final Judgments Against Massachusetts Company and Its President for Bogus "Bank Guarantee" Investment Scams The Securities and Exchange Commission announced today that on February 13, 2015, the Honorable Mark L. Wolf of the United States District Court for the District of Massachusetts entered a final judgment by consent against defendant Diane Glatfelter, of Billerica, Massachusetts, and against the company she controlled, K2 Unlimited, Inc., in a securities fraud case filed by the Commission in 2011. Glatfelter and K2 consented to the entry of a final judgment without admitting or denying the allegations against them. The final judgment imposes on both Glatfelter and K2 a permanent injunction against future violations of antifraud and other provisions of the federal securities laws, and imposes on Glatfelter a bar from serving as an officer or director of a publicly-traded company. Glatfelter was also held liable for disgorgement in the amount of $340,369.77, which the final judgment deemed was satisfied by an order of restitution entered against her in December 2014 following her criminal conviction of wire fraud for unrelated conduct. In its Complaint, filed September 19, 2011, the Commission alleged that beginning in 2007, Glatfelter, through her companies K2 and 211 Ventures, LLC, and with a co-defendant, Robert Rice, offered investments in fraudulent trading programs that purportedly involved "bank guarantees" and promised sky-high returns with guarantees against loss. In fact, the Commission alleges that the bank guarantees were fictional and the trading programs non-existent. According to the Commission, Glatfelter, through K2 and 211 and with Rice, defrauded investors of more than $1.8 million through that fraudulent scheme. According to the Commission's complaint, in early 2009, Glatfelter became associated with another defendant also charged in the federal complaint, Robert Anderson, and began with him to offer fraudulent investments, also based in part on fictitious financial instruments, causing additional investor losses of at least $425,000. The Commission also alleged that Glatfelter falsely assured investors that she was not a "scam artist," by pointing to her position with a separate, publicly-traded company. The final judgment permanently enjoins Glatfelter and K2 from violating Section 17(a) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; Sections 5(a) and 5(c) of the Securities Act; and Section 15(a) of the Exchange Act. The final judgment also permanently bars Glatfelter from serving as an officer or director of a public company. The final judgment found that Glatfelter was liable for disgorgement to investors in the amount of $340,369.77, representing her personal ill-gotten gains. The judgment deemed that Glatfelter's disgorgement is satisfied by the order of restitution entered on December 18, 2014 in the criminal case, United States v. Diane Glatfelter, Criminal No. 12-cr-10247-MLW (D. Mass.). In that case, a Massachusetts federal court entered a judgment against Glatfelter following her conviction of 4 counts of wire fraud, and sentenced Glatfelter to 30 months of imprisonment and to pay $1.575 million in restitution. The judgments against Glatfelter and K2 conclude the SEC's litigation in this matter. On March 13, 2013, the court entered final judgments by default against defendants 211 Ventures, LLC, and Robert S. Anderson, imposing judgments totaling more than $2.3 million in disgorgement, prejudgment interest and civil penalties, and permanently enjoining both defendants from future violations of the antifraud and other provisions of the federal securities laws. On April 4, 2014, the court entered a final judgment by consent against defendant Robert C. Rice, of Tallahassee, Florida, imposing a permanent injunction against future violations of antifraud and other provisions of the federal securities laws and ordering Rice to pay disgorgement, prejudgment interest and a civil penalty totaling $525,896.51. The Commission's Complaint alleges that the defendants in this matter purported to offer investments using so-called "bank guarantees," among other fictional instruments. Investors who are offered investments similar to those alleged in the Commission's complaint may want to consult the following information available on the SEC's website: "Prime Bank Investments" (http://investor.gov/investing-basics/avoiding-fraud/types-fraud/prime-bank-investments) "Warning to All Investors About Bogus "Prime Bank" and Other Banking-Related Investment Schemes" (http://www.sec.gov/divisions/enforce/primebank.shtml) "How Prime Bank Frauds Work" (http://www.sec.gov/divisions/enforce/primebank/howtheywork.shtml) For further information, see Litigation Releases No. 22098 (September 19, 2011), No. 22649 (March 19, 2013) and No. 22971 (April 11, 2014), and Admin. Rel. 71949 (April 15, 2014).
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23199 / February 18, 2015 Securities and Exchange Commission v. K2 Unlimited, Inc., Civil Action No. 1:11-cv-11649 SEC Obtains Final Judgments Against Massachusetts Company and Its President for Bogus "Bank Guarantee" Investment Scams The Securities and Exchange Commission announced today that on February 13, 2015, the Honorable Mark L. Wolf of the United States District Court for the District of Massachusetts entered a final judgment by consent against defendant Diane Glatfelter, of Billerica, Massachusetts, and against the company she controlled, K2 Unlimited, Inc., in a securities fraud case filed by the Commission in 2011. Glatfelter and K2 consented to the entry of a final judgment without admitting or denying the allegations against them. The final judgment imposes on both Glatfelter and K2 a permanent injunction against future violations of antifraud and other provisions of the federal securities laws, and imposes on Glatfelter a bar from serving as an officer or director of a publicly-traded company. Glatfelter was also held liable for disgorgement in the amount of $340,369.77, which the final judgment deemed was satisfied by an order of restitution entered against her in December 2014 following her criminal conviction of wire fraud for unrelated conduct. In its Complaint, filed September 19, 2011, the Commission alleged that beginning in 2007, Glatfelter, through her companies K2 and 211 Ventures, LLC, and with a co-defendant, Robert Rice, offered investments in fraudulent trading programs that purportedly involved "bank guarantees" and promised sky-high returns with guarantees against loss. In fact, the Commission alleges that the bank guarantees were fictional and the trading programs non-existent. According to the Commission, Glatfelter, through K2 and 211 and with Rice, defrauded investors of more than $1.8 million through that fraudulent scheme. According to the Commission's complaint, in early 2009, Glatfelter became associated with another defendant also charged in the federal complaint, Robert Anderson, and began with him to offer fraudulent investments, also based in part on fictitious financial instruments, causing additional investor losses of at least $425,000. The Commission also alleged that Glatfelter falsely assured investors that she was not a "scam artist," by pointing to her position with a separate, publicly-traded company. The final judgment permanently enjoins Glatfelter and K2 from violating Section 17(a) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; Sections 5(a) and 5(c) of the Securities Act; and Section 15(a) of the Exchange Act. The final judgment also permanently bars Glatfelter from serving as an officer or director of a public company. The final judgment found that Glatfelter was liable for disgorgement to investors in the amount of $340,369.77, representing her personal ill-gotten gains. The judgment deemed that Glatfelter's disgorgement is satisfied by the order of restitution entered on December 18, 2014 in the criminal case, United States v. Diane Glatfelter, Criminal No. 12-cr-10247-MLW (D. Mass.). In that case, a Massachusetts federal court entered a judgment against Glatfelter following her conviction of 4 counts of wire fraud, and sentenced Glatfelter to 30 months of imprisonment and to pay $1.575 million in restitution. The judgments against Glatfelter and K2 conclude the SEC's litigation in this matter. On March 13, 2013, the court entered final judgments by default against defendants 211 Ventures, LLC, and Robert S. Anderson, imposing judgments totaling more than $2.3 million in disgorgement, prejudgment interest and civil penalties, and permanently enjoining both defendants from future violations of the antifraud and other provisions of the federal securities laws. On April 4, 2014, the court entered a final judgment by consent against defendant Robert C. Rice, of Tallahassee, Florida, imposing a permanent injunction against future violations of antifraud and other provisions of the federal securities laws and ordering Rice to pay disgorgement, prejudgment interest and a civil penalty totaling $525,896.51. The Commission's Complaint alleges that the defendants in this matter purported to offer investments using so-called "bank guarantees," among other fictional instruments. Investors who are offered investments similar to those alleged in the Commission's complaint may want to consult the following information available on the SEC's website: "Prime Bank Investments" (http://investor.gov/investing-basics/avoiding-fraud/types-fraud/prime-bank-investments) "Warning to All Investors About Bogus "Prime Bank" and Other Banking-Related Investment Schemes" (http://www.sec.gov/divisions/enforce/primebank.shtml) "How Prime Bank Frauds Work" (http://www.sec.gov/divisions/enforce/primebank/howtheywork.shtml) For further information, see Litigation Releases No. 22098 (September 19, 2011), No. 22649 (March 19, 2013) and No. 22971 (April 11, 2014), and Admin. Rel. 71949 (April 15, 2014).