Securities Law Prof Blog

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

Wednesday, December 16, 2009

SEC Obtains Preliminary Injunction Against Co-Founder of Canopy Financial

The SEC announced that on December 8, 2009, the U.S. District Court of the Northern District of Illinois entered a preliminary injunction order enjoining Jeremy J. Blackburn, a co-founder and former President and Chief Operating Officer of privately-held Canopy Financial, Inc. (Canopy), from violating the antifraud provisions of the Securities Act of 1933 [Section 17(a)] and the Securities Exchange Act of 1934 [Section 10(b) and Rule 10b-5 thereunder] (Preliminary Injunction Order). Blackburn consented to the entry of the Preliminary Injunction Order. The asset freeze order entered by the Court on November 30, 2009, freezing Blackburn's assets continues.

Filed on November 30, 2009, in an emergency TRO action, the Commission's complaint alleges that Blackburn engaged in a scheme to defraud investors in a $75 million private placement offering and as part of the scheme misappropriated investor funds. The Commission's Complaint seeks, among other things, permanent injunctions against Blackburn and Canopy. The Commission's Complaint also seeks the disgorgement of ill-gotten gains, plus prejudgment interest thereon, and civil penalties.

Blackburn was charged in a federal criminal complaint unsealed on December 2, 2009, in the Northern District of Illinois.

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