Litigation Release No. 17244 / November 21, 2001
Securities and Exchange Commission v. W. David Blunk, Jr., Aubrey John Elam, Jr. and Stanley C. Eaves; Civil Action File NO. 5:99-CV-372(HL)
The Securities and Exchange Commission announced that on November 5, 2001, Judge Hugh Lawson of the United States District Court for the Middle District of Georgia entered Final Judgments of Permanent Injunction Against Defendants Aubrey John Elam, Jr. and Stanley C. Eaves restraining and enjoining each of them from future violations of Sections 17(a) and of the Securities Act of 1933 ("Securities Act") and ordering each of them to pay a civil penalty in the amount of $25,000 apiece. Elam and Eaves each consented to the entry of the Final Judgment of Permanent Injunction without admitting or denying the allegations of the Commission's complaint.
The Commission's complaint alleged that the defendants committed securities fraud by repeatedly offering to sell fictitious prime bank securities to Mercer University. According to the complaint, Blunk, Elam, and Eaves misrepresented that an investment of $5 - $10 million dollars would generate returns of 120% per year and that the safety of Mercer's principal would be guaranteed by one of several well-known European banks. The SEC also alleged that Eaves and Elam misrepresented what they were told about the investment by officials of a prominent Charlotte bank and by an FBI agent they spoke with in London. The complaint further alleged that the defendants misrepresented that the University could earn a return of 50% on an investment of $10 million in just 25 days.
See also: L.R. 16288 (September 22, 1999)