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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22722 / June 11, 2013

Securities and Exchange Commission v. Blake Richards, Civil Action No. 1:13-CV-1729 (N.D. Ga.)

Federal Court Preliminarily Enjoins Atlanta-Area Registered Representative Blake Richards from Securities Fraud Violations

On June 4, 2013, the Honorable Julie E. Carnes of the Northern District of Georgia, entered an order of preliminary injunction against Blake Richards of Buford, Georgia enjoining the defendant from further violations of the securities laws in connection with allegations that the registered representative misappropriated investor funds. Specifically, Richards is enjoined from further violations of the antifraud provisions of the federal securities laws, Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and Sections 206 (1) and Section 206 (2) of the Investment Advisers Act of 1940 ("Advisers Act"). The Order continued the freeze of Richards' assets put in place by the Court's order of May 23, 2013, and further prevented the destruction of documents, ordered an accounting and ordered expedited discovery. The Commission also seeks a permanent injunction, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties. Those claims will be adjudicated at a later date. Richards consented to the entry of the order of preliminary injunction, without admitting or denying the allegations of the Commission's complaint.

The Commission's complaint alleged that, since at least 2008, Richards, a registered representative of a broker dealer, misappropriated approximately $2 million from at least seven investors. The majority of the misappropriated funds constituted retirement savings and/or life insurance proceeds from deceased spouses. The Commission further alleged that Richards instructed investors to write out checks to entities under his control with the understanding that Richards would invest their funds in fixed income assets, variable annuities and/or common stock, and that none of these investments were made as represented. None of the investments appeared on the client's brokerage account statements, and Richards received no commission income from these investments. The complaint further alleged that Richards siphoned off the funds entrusted to him for personal use.

 

http://www.sec.gov/litigation/litreleases/2013/lr22722.htm


Modified: 06/11/2013