U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21989 / June 3, 2011

Securities and Exchange Commission v. Ronald Abernathy, Arthur Weiss and Sovereign International Group, LLC, No. 1:11-cv-580 (W.D. Mich. June 3, 2011)

The Securities and Exchange Commission today charged Ronald Abernathy and Arthur Weiss with orchestrating a $560,000 securities fraud through their company, Sovereign International Group, LLC ("SIG").

The SEC alleges that Abernathy and Weiss fraudulently obtained investor deposits by telling investors that they would use those funds to trade securities. According to the complaint, they used no investor funds to trade securities. Instead, Abernathy and Weiss misappropriated investor funds for their own personal use. Several investors have demanded that Abernathy and Weiss return their money. With the exception of a limited number of investors who received Ponzi-like payments, Abernathy and Weiss have failed to repay these investors. Instead, they have lulled the investors with various excuses for the delay and by promising repayment in the near future.

According to the SEC's complaint filed in the Western District of Michigan, Abernathy and Weiss told investors that funds invested by SIG were earning a profit. The SEC further alleges that Abernathy and Weiss did not invest any of those funds and none of the investors earned any actual profits. Additionally, at different times during the scheme, Abernathy and Weiss have told investors that SIG is engaged in the trading of securities, receiving fees in connection with the monetization of multi-million and multi-billion dollar financial instruments, brokering the sale of fine art and, most recently, brokering the sale of and/or refining precious metal ore concentrate. They also falsely told prospective investors that Abernathy was appointed "the director of a highly exclusive group of investors who are purchasing a Major League Baseball Franchise" and that this group of investors includes billionaires Paul Allen (co-founder of Microsoft) and Ted Turner (founder of CNN). Despite their repeated promises of imminent multimillion dollar payouts to SIG from these purported business ventures, SIG, in its entire existence, has not earned any profits, realized any returns or generated any revenue from any business operations. SIG's only income has consisted of money received from investors.

The SEC's complaint charges Abernathy, Weiss and SIG with securities fraud in violation 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 seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and the imposition of monetary penalties against all defendants.