U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21406 / February 3, 2010
Securities and Exchange Commission v. Coadum Advisors, Inc.; Mansell Capital Partners III, LLC; James A. Jeffery; Thomas E. Repke; Coadum Capital Fund 1, LLC; Coadum Capital Fund II, LP; Coadum Capital Fund III, LP; and Mansell Acquisition Company LP, Civil Action File No. 1:08-CV-0011-ODE (N.D. Ga.).
The Securities and Exchange Commission announced today that the Honorable Orinda D. Evans, United States District Judge for the Northern District of Georgia has entered final judgment against defendants James A. Jeffery ("Jeffery") of Ontario, Canada and Thomas E. Repke ("Repke") of Holladay, Utah. The judgment arises from an order granting the Commission's motion for summary judgment against Jeffery and Repke, which also ordered that they pay disgorgement in the amounts of $1,228,739.29 and $2,739,862.33, respectively, along with prejudgment interest thereon. The final judgment further ordered Jeffery and Repke to pay civil penalties in amounts equal to their respective disgorgement. Jeffery and Repke along with defendants Coadum Advisors, Inc. ("Coadum"), Mansell Capital Partners III, LLC ("Mansell"), Coadum Capital Fund 1, LLC ("Coadum 1"), Coadum Capital Fund II, LP ("Coadum II"), Coadum Capital Fund III, LP ("Coadum III") and Mansell Acquisition Company LP ("MAC") had previously been permanently enjoined from from future violations of Section 17(a) of the Securities Act of 1933 (Securities Act), and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. The Court had also previously enjoined defendants Coadum, Mansell, Jeffery and Repke from future violations of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 ("Advisers Act") [15 U.S.C. 15 U.S.C. §§ 80b-6 (1) and (2)]. The order of permanent injunction against all of the defendants was entered on January 25, 2008.
The Court made significant findings of fact and conclusions of law in the final judgment against Jeffery and Repke. Specifically, the Court concluded that the defendants falsely represented to investors that they would receive a return of from 3 to 6% per month, misrepresented that their principal was protected and never left the escrow account; and that Jeffery and Repke failed to disclose that they made loans to themselves from the investor proceeds. The Court also concluded that the defendants transferred the majority of the funds to Exodus Equities, Inc. ("Exodus") a Malta based "investment platform" which in turn appeared to have placed the funds in the Exodus Platinum Genesis Fund, Ltd. ("Exodus Platinum Fund"), a Bermuda hedge fund which had not begun operation, and in "Pre-REIT convertible bonds" which as yet had not provided any return. Furthermore, the final judgment concluded that the defendants falsely represented in monthly account statements to investors that they had earned approximately 4% per month, and that all or most of their principal was in escrow. Finally, the Court found that, without disclosure to investors, defendants Coadum and Mansell through the efforts of Jeffery and Repke also "borrowed" in excess of $3 million of, or against, the investors' funds and fraudulently disbursed approximately $5 million to related parties. The Court ordered defendants Jeffery and Repke to pay disgorgement, prejudgment interest thereon, and their respective civil penalties within 30 days from the entry of the final judgment, by making payment to the court appointed Receiver for the entity defendants.
See also: L.R. 20422 (January 3, 2008); L.R. 20444 (January 29, 2008); L.R. 20859 (January 21, 2009); and L.R. 20886 (February 6, 2009).