Securities Law Prof Blog

Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Wednesday, January 28, 2009

SEC Alleges Nashville Financial Planner Told Customers They Invested in TARP Program

On January 28, 2009, the SEC filed a complaint seeking emergency relief ("Complaint") in the United States District Court for the Middle District of Tennessee against Gordon B. Grigg ("Grigg") and ProTrust Management, Inc., d/b/a ProTrust Management Group, LLC d/b/a ProTrust Management Group, Inc. d/b/a ProTrust Management Group, Inc. LLC d/b/a ProTrust Corporation (collectively "ProTrust"). The Complaint alleges that ProTrust, a Tennessee corporation with offices in Nashville, is engaged in on-going securities fraud and that Grigg is a purported financial planner and an investment adviser who controls ProTrust.

From approximately 2007 to the present, according to the Complaint, Grigg and ProTrust defrauded at least 27 clients out of approximately $6.5 million by claiming to have invested the money in non-existent securities. Specifically, the Complaint alleges that the defendants have: (1) obtained control over client funds and falsely claimed to have invested such funds in fictitious securities that were described as "Private Placements;" (2) created false and fraudulent account statements reflecting the clients' ownership of non-existent securities; (3) falsely claimed that the defendants had the ability to invest client funds in government-guaranteed commercial paper and bank debt as part of the U.S. government's Troubled Asset Relief Program ("TARP"), and that they did invest client funds in the TARP program; and (4) falsely claimed to have partnerships and other business relationships with several of the nation's top investment firms.

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