U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22608 / February 4, 2013
Securities and Exchange Commission v. We The People, Inc., of The United States; Richard K. Olive and Susan L. Olive; William G. Reeves, Esq., Civil Action No. 2:13-cv-14050; 2:13-civ-14047; 2:13-cv-14048
SEC Charges We The People, Inc., of The United States and Three Individuals In Offering Fraud Scheme
On February 4, 2013, the Securities and Exchange Commission filed complaints in the U.S. District Court for the Southern District of Florida in connection with an offering fraud conducted by We The People, Inc. of the United States (“We The People”), a purported charitable organization based in Tallahassee, Florida.
In its complaint against Richard Olive, We The People’s former chief of program services, and Susan Olive, We The People’s former chief of finance and administration, the Commission alleges that the Olives, husband and wife, orchestrated a fraudulent scheme that raised more than $75 million from approximately 450 investors located across the United States, most of whom were senior citizens. Investors were solicited to transfer assets to We The People in exchange for what it called a charitable gift annuity. The Commission alleges that We The People – through the Olives – lured investors by making various false and misleading statements regarding, among other things, the value of the products sold and the safety and security of the investments. The complaint also alleges that the Olives failed to disclose to investors indictments and regulatory sanctions issued against them for fraudulently selling similar products. In addition to the misrepresentations, the Commission alleges that the Olives misappropriated investor funds for personal use.
The complaint alleges that, based on this conduct, Richard and Susan Olive violated, or aided and abetted the violation of, Sections 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 complaint also claims that the Olives violated Sections 5(a) and 5(c) of the Securities Act, and Section 15(a) of the Exchange Act. The Commission seeks that the Olives be permanently enjoined, and be ordered to pay disgorgement plus pre- and post-judgment interest, and third-tier civil money penalties.
In addition, the Commission filed settled actions against We The People and William Reeves, We The People’s in-house counsel. Without admitting or denying the Commission’s allegations, We The People consented to a final judgment providing injunctive relief under Sections 5(a), 5(c) and 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, disgorgement, and the appointment of a receiver to protect the more than $60 million of investor assets still held by We The People.
Without admitting or denying the Commission’s allegations, Reeves consented to a final judgment providing injunctive relief under Sections 5(a), 5(c), 17(a)(2) and 17(a)(3) of the Securities Act, and providing that the Court will determine issues relating to the imposition of a civil money penalty against him at a later date. Reeves also agreed to a suspension from appearing or practicing before the Commission as an attorney, with the right to apply for reinstatement after 5 years. Reeves entered into a cooperation agreement with the Commission, and the terms of his settlement reflect his assistance in the Commission’s investigation and anticipated cooperation in its pending enforcement action.