UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 44577 / July 19, 2001
File No. 3-10535
ADMINISTRATIVE PROCEEDINGS INSTITUTED AGAINST ELLSWORTH WAYNE MCLAWS AND ALAN CLAGG
The Commission announced that it issued an Order Instituting Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 against Ellsworth Wayne McLaws and Alan Clagg. In the Order, the Division of Enforcement alleges that from 1997 through March 1999, McLaws and Clagg were acting as an unregistered brokers, and on January 12, 2001, McLaws and Clagg were enjoined from violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Exchange Act of 1934 and Rule 10b-5 thereunder, by the U.S. District Court for the Northern District of Texas (Dallas Division) [SEC v. Cook, et al., 3-99-CV-0571-X]. The Commission's Complaint alleged that McLaws, Clagg and others raised more than $30 million through the offer and sale of unregistered securities in a nonexistent "prime bank" trading program. The Complaint alleged that investment funds were misappropriated for personal and unauthorized uses, such as making Ponzi payments.
A hearing before an administrative law judge will be scheduled to determine whether the allegations in the Order are true and to determine what remedial action, if any, is appropriate in the public interest.