U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22782 / August 19, 2013
Securities and Exchange Commission v. Robert Narvett and Shield Management Group, Inc., Civil Action No. 1:13-cv-00927 (E.D. Wis.) (Chief Judge Griesbach)
The Securities and Exchange Commission charged Appleton, Wisconsin resident Robert Narvett and his company Shield Management Group, Inc. ("Shield") with fraud, alleging that he operated a scheme that raised at least $940,000 from twenty investors.
In a complaint filed on August 16, 2013, filed in the U.S. District Court for the Eastern District of Wisconsin, the SEC alleges that beginning in at least March 2010, Narvett raised funds though the fraudulent offer and sale of promissory notes issued by Shield.
The SEC alleges that in exchange for their money, Narvett guaranteed investors that they would receive their principal investment plus a twenty percent return at the end of a specified term. Although he provided few details regarding how he would use their funds, Narvett told some investors that he would use the money as working capital to build Shield's business.
According to the SEC's complaint, instead of using investor money for Shield's business, Narvett misappropriated investor funds for his personal use. Narvett used investor money to, among other things, fund trading in his personal brokerage accounts, purchase a car and to pay for personal expenses such as his mortgage.
The SEC complaint alleges violations of Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder by Narvett and Shield. As part of this action, the SEC seeks an order of permanent injunction against Narvett and Shield, the payment of disgorgement of ill-gotten gains, prejudgment interest and civil penalties.