UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16479 / March 21, 2000
Securities And Exchange Commission v. Shan Michael Hefley, Civil Action No. 7:00-CV-048-R (USDC NDTX, Wichita Falls Division)
On March 21, 2000, the Commission filed a civil action against a registered representative who targeted and defrauded his elderly customers of more than $400,000. The Commission's Complaint alleges that, from September 13, 1996, through January 15, 1999, while a registered representative associated with Edward D. Jones & Co., LP, and working in its office in Bowie, Texas, Shan Michael Hefley liquidated, without his customers' knowledge or consent, various investments totaling $405,932. The monies were in the accounts of seven customers ranging in age from 77 to 92 years old. Hefley initially caused these funds to be deposited in his brokerage account or in other Edward Jones' accounts over which he exercised control. The monies were subsequently withdrawn by Hefley or transferred by him to his personal bank account. The misappropriated funds were used for his own personal benefit.
Simultaneous with the filing of the Complaint, Hefley consented, on a neither admit or deny basis, to the entry of a Final Judgment permanently enjoining him future violations of the antifraud provisions of the federal securities laws and requiring him to disgorge $160,516 - the balance of non-reimbursed funds misappropriated by Hefley. The agreed Final Judgment also orders Hefley to pay prejudgment interest of $55,679 and a civil penalty of $55,000.
The Final Judgment permanently enjoins Hefley from future violations of the antifraud provisions of the federal securities laws contained in Section 17(a) of the Securities Act of 1933, as amended, and Section 10(b) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 thereunder.
The Commission would like to acknowledge the invaluable assistance of the Texas State Securities Board, as well as that of the Federal Bureau of Investigation.http://www.sec.gov/litigation/litreleases/lr16479.htm