Capital Consultants, LLC, Jeffrey L. Grayson, and Barclay L. Grayson

On September 21, 2000, the SEC obtained a preliminary injunction against Capital Consultants, LLC, a registered investment adviser that managed more than $1 billion, and its principals Jeffrey L. Grayson and his son Barclay L. Grayson. The SEC alleged the defendants employed a Ponzi-like scheme to cover-up enormous losses from several bad loans. For more information about the SEC's action, you can read Litigation Release No. 16720 (Sept. 21, 2000).

The Court appointed Thomas F. Lennon as Receiver. He has essentially wound down the business by selling private and public investments and real property. To date, the Receiver has made three distributions totaling approximately $210 million. The Receiver is currently in the process of preparing a fourth distribution to CCL investors/creditors in the amount of approximately $24 million. The Receiver anticipates that checks will be mailed on or before July 21, 2006. This fourth distribution, when added to the three previous distributions, represents the bulk of the assets available for distribution.

The Receiver continues to reserve funds pending the outcome of an appeal that is still under submission with the Ninth Circuit, and for certain other contingencies. Depending on the outcome of that appeal, there may be another final distribution of a very modest amount before the case is closed. If a further final distribution is to be made, it will likely occur sometime between the end of 2006 and the middle of 2007. Please check the Receiver's website periodically for further announcements and updates.

If you have questions, you can contact the Receiver at:

Thomas F. Lennon, Inc.
7777 Alvarado Road, Suite 712
La Mesa, CA 91941
Phone: (619) 668-6680
Fax: (619) 465-9288

http://www.sec.gov/divisions/enforce/claims/capconsult.htm