U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20208 / July 25, 2007
SEC v. International Fiduciary Corp., S.A., et al., U.S. District Court for Eastern District of Virginia (Civil Action No. 1:06CV1354)
Final Judgments Entered Against Preston David Pinkett, II and International Fiduciary Corporation in Over $40 Million Prime Bank Fraud
The Securities and Exchange Commission ("Commission") announced today that the Honorable Gerald Bruce Lee, United States District Judge for the Eastern District of Virginia, has entered Final Judgments as to Defendants International Fiduciary Corporation, S.A. ("IFC"), and its chairman and CEO, Preston David Pinkett, II ("Pinkett"), restraining and enjoining them from future violations of Sections 5 and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act and Rule 10b-5 thereunder. (The judgment against IFC was entered on July 20, 2007 and the judgment against Pinkett was entered on July 3, 2007.) Pinkett and IFC consented to the entry of the judgments without admitting or denying any of the allegations of the Commission's First Amended Complaint. The Court ordered disgorgement against Pinkett in the amount of $5,101,000, plus prejudgment interest of $153,061. Pinkett was also ordered to pay a civil penalty of $100,000. With respect to IFC, the Court ordered disgorgement against it in the amount of $24,037,362.95 plus prejudgment interest of $971,109.46. The Court, however, did not impose a payment obligation on IFC based on the fact that Roy M. Terry, Jr., the Court-Appointed Receiver for IFC, will instead prepare a plan (subject to the SEC's consent) to distribute all those funds — and all other funds paid by Defendants and Relief Defendants in this case — to investor victims in the United States, Canada, and any other locations.
The Commission filed its complaint against IFC, Pinkett, and two other defendants — Daniel Eric Byer ("Byer") and Malcolm Cameron Boyd Stevenson ("Stevenson") — on December 4, 2006, alleging that they defrauded investors through a fraudulent "asset growth program" purportedly involving risk-free participation in the trading of "1st tier medium-term bank notes." On that same date, the Court issued an order that, among other things, temporarily restrained IFC, Pinkett, Byer, and Stevenson from violating the antifraud provisions of the federal securities laws, and freezing investor funds wherever located and all assets of the defendants. On December 11, 2006, the Court entered a preliminary injunction which extended the temporary restraining order and asset freeze. On January 19, 2007, on the Commission's motion, the Court appointed Roy M. Terry, Jr., Esq. as Receiver over IFC. On April 19, 2007, the Commission filed an amended complaint that alleged, among other things, that the defendants raised at least $40 million from at least 140 investors, and added two individuals and four Washington State-based companies as relief defendants. On June 19, 2007, the Court entered default judgments against Byer and Stevenson.
The Commission wishes to acknowledge the continuing assistance of the British Columbia Securities Commission. For further information, see Litigation Release Nos. 19934 (December 5, 2006); 19976 (January 23, 2007); 20087 (April 24, 2007), and 20158 (June 20, 2007).