U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17256 / December 5, 2001
SECURITIES AND EXCHANGE COMMISSION v. JOHN C. WILLY, JR., Civil Action No. EDCV01-979VAP (SGLx)
The United States Securities and Exchange Commission today announced that it has filed a Complaint against John C. Willy, Jr., a Southern California resident, alleging that he violated the federal securities registration and antifraud provisions. Willy promoted an overseas "high-yield" investment program that raised more than $4.5 million from investors. The investment program purportedly provided guaranteed profits of 100 percent per month. In reality, the investment program did not exist and Willy used investor money to pay for his personal expenses.
The Complaint alleges that Willy, purportedly acting on behalf of Temperance Investments Ltd., a Gibraltar company, entered into agreements with two investor groups whereby Temperance would provide investors with access to a purported investment program in which short-term bank-debt instruments could be purchased at a discount and quickly sold at a profit. Willy told the investor groups that their monies would never be placed at risk. Instead, investor monies would remain in separate bank accounts and would generate lines of credit that Temperance would use in the program. In fact, investor monies were commingled and transferred from their account in Gibraltar to any one of several accounts in Europe and the United States that were controlled by Willy.
The lawsuit, which was filed in the United States District Court for the Central District of California, Eastern Division, in Riverside, California, alleges that Willy violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, it alleges that Willy violated the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act. The Commission seeks a permanent injunction, disgorgement, and a civil penalty against Willy.
For more information about prime bank frauds, visit the SEC's website at http://www.sec.gov/divisions/enforce/primebank.shtml.