SEC v. Gerald D. Kegley, No. LR-22634, Northern District of Georgia (Mar. 7, 2013) — Press Release
raw: Gerald D. Kegley, et al.
Gerald D. Kegley, et al., No. 1:12-CV-1605 (Mar. 7, 2013)
Gerald D. Kegley, an Arizona resident, was ordered to pay $209,731.92 for his role in a fraudulent scheme that misled investors into investing $1.95 million, and was permanently enjoined from future securities law violations.
Gerald D. Kegley was accused of participating in a fraudulent scheme that misled investors into investing $1.95 million. The alleged fraud involved misrepresenting the existence of bank guarantees and the use of investor funds, which were actually misappropriated immediately. Kegley was ordered to pay $209,731.92, consisting of disgorgement of $99,940, prejudgment interest of $9,851.93, and a civil penalty of $99,940.
Gerald D. Kegley, an Arizona resident, was accused of participating in a fraudulent scheme that misled investors into investing $1.95 million. The alleged fraud involved misrepresenting the existence of bank guarantees and the use of investor funds, which were actually misappropriated immediately. Kegley was found to have knowingly disseminated false claims, including that investor funds would be secured by non-existent bank guarantees and held in escrow, while secretly receiving commissions immediately after funds were transferred. He also falsely claimed prior success in a similar program, when in fact he had reported that scheme to the FBI as fraudulent. The court permanently enjoined Kegley from future securities law violations and ordered him to pay $209,731.92 in disgorgement, prejudgment interest, and a civil penalty. The SEC's complaint alleged that Kegley was directly responsible for introducing six individuals to the fraudulent scheme, which occurred between April and August 2010. Kegley was charged with violating Sections 5(a), 5(c), and 17(a) of the Securities Act and Sections 10(b) and 15(a) of the Exchange Act, along with Rule 10b-5, and for aiding and abetting securities fraud.
Extracted insights
- $1.95M $1.95 million $1M–$10M
- $210K $209,731 $100K–$1M
- $100K $99,940 $10K–$100K
- $10K $9,851 <$10K
- person final judgment
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
- Securities and Exchange Commission announced that Judge Thomas W. Thrash, Jr. entered a final judgment on February 26, 2013, permanently enjoining Gerald D. Kegley
- Judge Thomas W. Thrash, Jr. entered a final judgment on February 26, 2013, permanently enjoining Gerald D. Kegley
- final judgment restrained and enjoined Gerald D. Kegley from future violations
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 22634 / March 7, 2013 Securities and Exchange Commission v. Gerald D. Kegley, et al., Civil Action No. Case No. 1:12-CV-1605 (N.D. Ga) Court enters final judgment against Arizona Resident The Securities and Exchange Commission ("Commission") announced today that the Honorable Thomas W. Thrash, Jr., United States District Judge for the Northern District of Georgia, entered a final judgment on February 26, 2013, permanently enjoining Gerald D. Kegley ("Kegley"). The final judgment restrained and enjoined Kegley from future violations of Sections 5(a) and (c) and 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 promulgated thereunder. The order also restrained and enjoined Kegely from aiding and abetting future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Kegley was ordered to pay disgorgement of $99,940, prejudgment interest of $9,851.93, and a civil penalty of $99,940, for a total of $209,731.92. The Commission's complaint, filed on May 8, 2012, alleged that from at least April 8, 2010 through at least August 20, 2010, the defendants were directly responsible for introducing six individuals, who invested $1.95 million, to the fraudulent scheme. The complaint alleges that in furtherance of the scheme, the defendants forwarded misrepresentations made by others to investors. These misrepresentations included: 1) that investors could draw upon bank issued guarantees worth millions of dollars without having to repay the withdrawn funds; and 2) that investor funds would be held in escrow until the bank guarantees were issued. The complaint alleges that defendants knew or were reckless in not knowing that both of these representations were false because no such bank guarantees existed and investor funds were misappropriated immediately upon receipt. Defendants also misrepresented that they would be paid commissions only once the investor received the bank guarantee. In fact, defendants were paid commissions relatively soon after the investors transferred the money. Defendants further told investors that they had previously worked on a successful bank guarantee program. Defendants, however, had actually reported this purportedly successful bank guarantee program to the Federal Bureau of Investigation because they believed it was a fraud. See also L.R. 22361U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 22634 / March 7, 2013 Securities and Exchange Commission v. Gerald D. Kegley, et al., Civil Action No. Case No. 1:12-CV-1605 (N.D. Ga) Court enters final judgment against Arizona Resident The Securities and Exchange Commission ("Commission") announced today that the Honorable Thomas W. Thrash, Jr., United States District Judge for the Northern District of Georgia, entered a final judgment on February 26, 2013, permanently enjoining Gerald D. Kegley ("Kegley"). The final judgment restrained and enjoined Kegley from future violations of Sections 5(a) and (c) and 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 promulgated thereunder. The order also restrained and enjoined Kegely from aiding and abetting future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Kegley was ordered to pay disgorgement of $99,940, prejudgment interest of $9,851.93, and a civil penalty of $99,940, for a total of $209,731.92. The Commission's complaint, filed on May 8, 2012, alleged that from at least April 8, 2010 through at least August 20, 2010, the defendants were directly responsible for introducing six individuals, who invested $1.95 million, to the fraudulent scheme. The complaint alleges that in furtherance of the scheme, the defendants forwarded misrepresentations made by others to investors. These misrepresentations included: 1) that investors could draw upon bank issued guarantees worth millions of dollars without having to repay the withdrawn funds; and 2) that investor funds would be held in escrow until the bank guarantees were issued. The complaint alleges that defendants knew or were reckless in not knowing that both of these representations were false because no such bank guarantees existed and investor funds were misappropriated immediately upon receipt. Defendants also misrepresented that they would be paid commissions only once the investor received the bank guarantee. In fact, defendants were paid commissions relatively soon after the investors transferred the money. Defendants further told investors that they had previously worked on a successful bank guarantee program. Defendants, however, had actually reported this purportedly successful bank guarantee program to the Federal Bureau of Investigation because they believed it was a fraud. See also L.R. 22361