Wednesday, August 27, 2008
The SEC recently filed an action in Dallas federal court to halt an alleged unregistered and fraudulent offering of securities by Patrick H. Haxton and his company Royal Forex Management, LLC ("Royal"). that involve the trading of foreign currencies on the Forex market. The judge entered a temporary restraining order suspending the offering and orders freezing the defendants' assets, requiring sworn accountings, prohibiting any alteration or destruction of documents and expediting discovery. The Commission's Complaint alleges that from at least June 2007 to the present defendants raised at least $305,000 from 8 investors in three states. Haxton offers the Forex investments through the Royal web site, advertising on his work truck and personal contacts. Royal's promotional materials and Haxton's oral statements included claims of 400% to 500% annual returns.
The defendants are charged with securities fraud under 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, and with conducting an unregistered offering under Section 5 of the Securities Act. The Complaint also seeks permanent injunctions, civil penalties and disgorgement of ill-gotten gains, among other relief, against each defendant.