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U.S. Securities and Exchange Commission


Litigation Release No. 20879 / February 4, 2009

SEC v. Scott M. Ross, Civil Action No. 09 -CV-683 (N.D. Ill.)(Zagel, J.)

The Securities and Exchange Commission today filed an emergency enforcement action against Scott M. Ross, a resident of Gilberts, Illinois, charging that Ross fraudulently obtained at least $10 million from approximately 300 investors. The SEC has obtained an emergency court order freezing Ross's assets and appointing a receiver.

The SEC's complaint alleges that, beginning in 2007, Ross solicited investments in three purported private investment funds that Ross managed. Specifically, according to the complaint, Ross raised approximately $2 million from investors for the Elucido Fund LP ("Elucido"), telling investors that Elucido would invest in life settlement contracts. In connection with the second fund, the SEC alleges that Ross raised approximately $2 million from investors that was to be used to purchase stock in a company called Moondoggie Technologies. Finally, the complaint alleges that Ross raised between $6 million and $7 million for the Maize Fund LP, telling investors that their money would be pooled and invested in a Forex Account in which traders would engage in arbitrage currency trading.

The SEC complaint alleges that, in reality, Ross misappropriated approximately $2 million from Elucido and an undetermined sum in connection with the Moondoggie Technology stock purchases. Among other things, Ross used misappropriated funds to purchase a skybox at the Indianapolis Colts stadium, and pay purported returns to investors.

The SEC's complaint alleges that Ross violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition to emergency relief, the Commission's complaint seeks disgorgement of Ross's ill-gotten gains, prejudgment interest and a civil penalty.

Ross consented to the emergency relief sought by the SEC and the Honorable James B. Zagel, United States District Court, Northern District of Illinois, issued an order permanently enjoining Ross from further violations, freezing his assets and appointing Philip L. Stern of the law firm of Neal Gerber & Eisenberg LLP as Receiver in the matter.

SEC Complaint



Modified: 02/04/2009