U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20787 / October 22, 2008
SEC v. Raymond Thomas and Strictly Stocks Investment Company, Inc., Civil Action No. 1:08-cv-02503-CAB (N.D. Ohio) (Boyko, J.)
The Securities and Exchange Commission (“SEC”) today filed a complaint alleging that Raymond Thomas (“Thomas”) and his company, Strictly Stocks Investment Company, Inc. (“Strictly Stocks”) operated a fraudulent offering scheme that raised at least $620,000 from at least 26 investors, many of whom were retired police officers and firefighters.
The SEC’s civil injunctive complaint, filed in the U.S. District Court, Northern District of Ohio, alleges that Thomas and Strictly Stocks raised at least $620,000 between 1997 and 2006 from investors while acting as unregistered investment advisers. According to the complaint, Thomas, who is himself a retired police officer, preyed upon Cleveland area active and retired police officers and firefighters, as well as his friends and family. The complaint alleges that Thomas and Strictly Stocks told investors that their funds would be invested in stocks and options. The complaint goes on to allege that Thomas instead misappropriated the funds and, among other things, used the funds to support his own private business ventures, including a limousine company and a title company, and for his own personal use.
The SEC complaint alleges violations of Section 17(a) of the Securities Act of 1933 (“Securities Act”), Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (“Advisers Act”) by Thomas and Strictly Stocks. As part of this action, the SEC seeks an order of permanent injunction against Thomas and Strictly Stocks as well as the payment of disgorgement of ill-gotten gains, prejudgment interest and civil penalties.