U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20073 / April 9, 2007
SEC v. Global Online Direct, Inc., Bryant E. Behrmann, and Larry "Buck" E. Hunter, Civil Action No 1:07-CV-0767 (N.D. Ga., filed April 5, 2007).
The Securities and Exchange Commission announced today that it has filed a Complaint in the United States District Court for the Northern District of Georgia to halt the sale of unregistered securities by Global Online Direct, Inc. (Global), a Nevada corporation headquartered in Union, Oregon, and its principals, Bryant E. Behrmann (Behrmann), of Henderson, Nevada, and Larry "Buck" E. Hunter (Hunter), of La Grande, Oregon.
In the Complaint, the Commission charges that, since at least October 2005, Global, Behrmann and Hunter have conducted an unregistered offering of securities through the provision of interests in Global's "Secured Profit Inventory Program" (SPIP). The Complaint alleges that Global, Behrmann and Hunter primarily promoted Global's SPIP through the internet and solicited investors to "loan" Global funds for a term of one-year in exchange for promised daily interest payments. The greater the amount of the purported loan, the greater the interest payments Global offered to investors. Global initially offered daily interest rates to investors of 0.20% per day for amounts up to $100, which it referred to as the "Start-Up" plan, and for investors willing to invest $10,000 or more, they could participate in Global's "Big Dawgs Club" and receive 1.00% daily interest. Global further offered investors the ability to lock-up access to their interest payments for one-year in exchange for 100% daily compounding on all interest payments. Global therefore offered investors effective annual rates of return of more than 1,100%. In order to generate revenue sufficient to pay investors their promised returns, Global claimed to pool investor proceeds to purchase discounted and low-cost inventory, which Global then purported to resell through various online auction websites, including Ebay and Yahoo! Auctions, as well as through flea markets, street sales and retail storefronts. From October 2005 through March 2007, the Complaint alleges that Global raised approximately $15 million from more than 8,000 investors.
The Commission's Complaint alleges that Global, Behrmann and Hunter violated the securities registration provisions of Sections 5(a) and (c) of the Securities Act of 1933 and seeks preliminary and permanent injunctions, an accounting, a partial asset freeze against Global, disgorgement of ill-gotten gains, prejudgment interest and civil penalties against Global, Behrmann and Hunter, and the appointment by the Court of an independent corporate monitor to oversee Global's ongoing business operations.
Without admitting or denying the allegations of the Complaint, Global, Behrmann and Hunter consented to the Commission's request for preliminary injunctive relief, a partial asset freeze against Global, and the appointment of a corporate monitor to oversee Global's ongoing business operations. On April 5, 2007, on the basis of Defendants' consent, the Court issued an Order Granting Preliminary Injunction and Ordering Other Ancillary Relief.
The litigation remains pending as to all parties.