U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21788 / December 22, 2010
SEC v. Jason R. Hyatt, Jay Johnson and Hyatt Johnson Capital, LLC, Civil Action No. 1:08-cv-2224 (N.D. Ill.) (Lindberg, J.)
The Securities and Exchange Commission (“Commission”) announced that on December 8, 2010, the Special March 2010 Grand Jury for the Northern District of Illinois returned a three-count indictment for Jay D. Johnson, a defendant in the Commission’s above captioned litigation. U.S. v. Jay D. Johnson, Criminal Action No. 1:10-cr-1030 (N.D. Ill.) (Norgle, J.). This indictment consisted of three counts of wire fraud (18 USC 1343) in connection with funds Johnson obtained from his investment advisory clients for the purpose of lending them to an area physician. Instead of using the funds as stated the indictment alleges Johnson used the funds for his own personal benefit and to make payments to other investors.
Previously, on April 18, 2008, the Commission filed a civil injunctive complaint alleging that Defendants Hyatt, Johnson, and HJ Capital, from approximately 2003 through 2007, while acting as unregistered broker-dealers and investment advisers, misappropriated at least $5.4 million in investor funds. The Complaint alleged that, as a result of their conduct, the Defendants violated Section 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder.