James S. Quay (Corrected)
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23377 [Corrected] / October 5, 2015
Securities and Exchange Commission v. James S. Quay, Civil Action No. 12-cv-03429 (United States District Court for the Northern District of Georgia)
Court Finds James Quay in Criminal Contempt for Perjury and Fraud Upon the Court
The Securities and Exchange Commission announced today that on September 28, 2015, Judge Richard Story of the United States District Court for the Northern District of Georgia found James S. Quay guilty of criminal contempt arising from Mr. Quay's false testimony at hearing concerning his nonpayment of disgorgement and penalties ordered by the court pursuant to a 2012 judgment.
On October 2, 2012, the SEC charged Mr. Quay, a convicted felon and disbarred attorney, with defrauding two elderly women he convinced to invest with him directly. On October 19, 2012, Mr. Quay, without admitting or denying the allegations of the complaint, consented to entry of a Final Judgment that, among other things, ordered him to pay approximately $2 million in disgorgement, prejudgment interest, and penalties. Mr. Quay did not make any payment toward the judgment for nearly three years. The SEC then learned that Mr. Quay had access to two trust accounts with total liquid assets in excess of $1.2 million. The accounts belonged to the living trust of one of the two elderly women that the SEC charged Mr. Quay with defrauding in its complaint, who had since passed away. The SEC sought, and obtained, an asset freeze preventing Mr. Quay from withdrawing the funds. The SEC also moved for civil contempt based on Mr. Quay's willful noncompliance with the judgment.
On September 28, 2015, the court held a hearing on the SEC's civil contempt motion. At the hearing, the court found Mr. Quay guilty of criminal contempt because he had perjured himself and offered false evidence to explain his actions. The court ordered Mr. Quay to serve ten days imprisonment and continued the asset freeze. The court did not rule on the SEC's contempt motion.
The SEC's litigation against Mr. Quay is being led by Christopher R. Thomson and Robert K. Gordon.
For more information, see Litigation Release No. 22506 (October 4, 2012).