Friday, August 11, 2006

Retirement Secrets of the Rich Triggers SEC Fraud Action

The SEC filed a civil securities fraud action against Jon W. James and his firm, Jon W. James & Associates (JWJA), for a program targeting retirement funds that would be invested in real estate and generate "double-digit returns" for participants.  James solicited investors by inviting them to free dinners that advertised "Retirement Secrets of the Rich: What your Accountant and Stockbroker don’t want you to know.”   According to the SEC Litigation Release (here):

[I]nvestors are falsely told that their funds will be used for profitable real estate transactions that will provide returns, which at times were represented to be as high as 24%. The complaint alleges that the defendants offered and sold promissory notes and, later, interests in limited liability companies.

The Commission’s complaint alleges that, throughout 2004 and 2005, defendants did not purchase any real estate or real estate related assets from which to pay investor returns. Additionally, the complaint alleges that the defendants misrepresented to investors that their investments would be secured by real property or by monies owed to JWJA from real estate transactions. The complaint also alleges that defendants fraudulently failed to disclose that they used new investor money to pay returns to previous investors.

In investing, there just aren't that many secrets, except the one that if it sounds to good to be true . . . (ph)

http://lawprofessors.typepad.com/whitecollarcrime_blog/2006/08/retirement_secr.html

Civil Enforcement, Fraud, Securities | Permalink

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