U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21693 / October 14, 2010
Securities and Exchange Commission v. Algird M. Norkus and Financial Update, Inc., Case No. 1:10-cv-06582 (N.D. Ill., filed October 14, 2010)
The Securities and Exchange Commission today announced fraud charges against Algird M. Norkus, a resident of Sugar Grove, Illinois and the corporation he controlled, Financial Update, Inc. ("Financial Update").
The Commission's complaint alleges that Norkus, acting as President of Financial Update, raised at least $6.4 million from at least 17 investors through the offer and sale of promissory notes issued by Financial Update. The complaint further alleges that Norkus told the investors that their money would be used to fund Financial Update's business activities and that he enticed investors by promising interest rates between 11% and 24% per year.
The complaint goes on to allege that in reality, Norkus used investor money to pay for personal expenses such as his mortgage and a car and that he also used the money provided by newer investors to make interest and principal payments to earlier investors. The complaint alleges that Norkus never disclosed to investors that he was using their money in this fashion.
The Commission's complaint charges Financial Update and Norkus with violating 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 and seeks, among other things, permanent injunctions, disgorgement plus prejudgment interest, civil penalties and asset freezes. Financial Update and Norkus have consented to certain relief sought by the Commission including orders freezing their assets and permanently enjoining them from future violations of 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.
The Commission's investigation of this matter is continuing.
See Also: SEC Complaint