Securities and Exchange Commission
Litigation Release No. 17162 / September 28, 2001
Securities and Exchange Commission v. Richard M. Eisenmenger and Leroy K. Messenger, U.S. District Court for the Northern District of Illinois, Civil Action No. 01 C 7506 (N.D. Ill. September 28, 2001)
The Commission today filed securities fraud charges in the United States District Court for the Northern District of Illinois against Richard M. Eisenmenger, a resident of McHenry, Illinois, and LeRoy K. Messenger, a resident of Elk Grove Village, Illinois, for making material misrepresentations regarding securities they sold in companies they owned.
The Complaint alleges that Eisenmenger and Messenger sold over $11 million of preferred stock and notes of companies they owned while making material misstatements about the use of the funds raised, the debts the companies would become obligated to pay, and the collateral protecting the investments. Eisenmenger and Messenger were formerly the President and Chief Financial Officer, respectively, of Geneva Securities, Inc., a defunct broker-dealer formerly based in Schaumburg, Illinois. Further, the Complaint alleges that Eisenmenger sold investments that were unsuitable for some of his customers, many of whom were elderly and retired, used customer funds to purchase securities without their permission, and diverted assets of certain customers to the accounts of Geneva-affiliated companies.
Eisenmenger and Messenger have consented, without admitting or denying the allegations in the Complaint, to the entry of Final Judgments which will enjoin them from future violations of Sections 17(a)(1), (2) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Judgments will also order Eisenmenger and Messenger to disgorge $3,480,000 and $2,711,000, respectively, but waive payment of disgorgement and seek no penalties due to their demonstrated inability to pay.