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Litigation Release No. 21115 / July 1, 2009

Securities and Exchange Commission v. James H. Park, Civil Action No. 6:09-CV-1137-ORL-19-GJK

SEC Charges Orlando, Florida Resident In Connection With Fraudulent Pyramid Scheme

The Securities and Exchange Commission filed a civil injunctive action on July 1, 2009 against James H. Park of Orlando, Florida for his alleged role in a fraudulent pyramid scheme called Wealth Pools International, Inc. ("Wealth Pools"), which raised at least $132 million from more than 10,000 investors. Wealth Pools purported to be a multi-level marketing company selling a language tutorial DVD through a network of members around the world. The Commission alleged that, in reality, it was a fraudulent pyramid scheme premised on the sale of memberships and thus destined to collapse, leaving the majority of investors with substantial losses. On December 6, 2007, the Commission obtained a temporary injunction and the appointment of a receiver over Wealth Pools, bringing the scheme to a halt.

The SEC's complaint alleges that Park established the telemarketing sales force at Wealth Pools, headed the customer service department, and solicited investors into the fraudulent pyramid scheme. The complaint also alleges that while offering and selling Wealth Pools's securities, Park misled investors about Wealth Pools' business structure, the safety of the Wealth Pools investment, and the dilutive effect on the commissions from the addition of new investors. The complaint further alleges Park failed to disclose to investors his role in a similar pyramid scheme, which ended in bankruptcy after two years. Finally, the complaint alleges that Park illegally operated as an unregistered broker-dealer.

The SEC's complaint, filed in the United States District Court for the Middle District of Florida, charges Park with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and with aiding and abetting Wealth Pools's violations of Section 10(b) and Rule 10b-5. The SEC seeks a permanent injunction, disgorgement with prejudgment interest, and civil money penalties against Park.

For additional information, see Litigation Release No. 20393 (Dec. 11, 2007).

SEC Complaint



Modified: 07/01/2009