U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21885 / March 15, 2011
Securities and Exchange Commission v. Charles William Petty, II, et al., Civil Action No. 1:10-cv-03842-RWS (N.D.GA.)
The Securities and Exchange Commission (“Commission”) announced today that the Honorable Richard W. Story, United States District Judge for the Northern District of Georgia, entered an order and final judgment permanently enjoining Charles William Petty, II (“Petty”), Visionary Publishing International, LLC (“Visionary”), and Virtual Properties Worldwide, Inc. (“Worldwide”) (collectively, “Defendants”). The order and final judgment restrained and enjoined Reynolds from future violations of Sections 5(a), (c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder. Defendants were also ordered to pay disgorgement in the amount of $263,100, pre-judgment interest in the amount of $45,606.24 and a civil penalty in amount of $20,000.
The Court found that, from since at least 2007 to the present, Petty offered and sold at least $236,000 of promissory notes (Notes) issued by the Visionary companies to at least eleven investors in Georgia, North Carolina, Texas, California, New Jersey, and Canada. The Court also found that the defendants generally told investors that the Notes were “safe and high-yielding” and that the Note proceeds would be invested in real estate or “real estate related projects.” The defendants also told investors that each Note would be secured by a mortgage security deed on a particular property in Georgia, Tennessee, Alabama, North Carolina, or South Carolina at a loan to value ratio of no more than 60 to 75%. The Court found that these representations were false because no mortgage security deeds on properties were ever created, and Petty admitted that the Note proceeds were not invested in real estate or real estate related projects.
See also: LR-21756