U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No.18471 / November 19, 2003
Securities and Exchange Commission v. United Currency Group, Inc. and its CEO, Adam Swickle Civ. No. 03 9161 (JGK
SEC Files Injunctive Action Against United Currency Group, Inc. and its CEO, Adam Swickle, Alleging a Fraudulent Offering of Securities.)
On November 19, 2003, the Commission filed a complaint in the United States District Court of the Southern District of New York alleging that Adam Swickle conducted a fraudulent offering of United Currency Group, Inc.'s ("UCG") securities from May 2001 through December 2002. Through this offering, Swickle and UCG fraudulently raised approximately $774,000 from 21 investors.
The Complaint names the following defendants:
The complaint alleges the following. Swickle formed UCG in January 2001 purportedly to provide individual currency traders with access to the foreign currency market. Beginning in May 2001 and continuing through December 2002, Swickle solicited investments in UCG through an unregistered offering of securities. In connection with the offering, Swickle circulated private placement memoranda to prospective investors that made material misrepresentations and omitted material facts about the identity of UCG's officers and directors, Swickle's background and Swickle's use of corporate funds. For example, the private placement memoranda identified four individuals as officers and directors of UCG when, in fact, none of the individuals had agreed to serve in that capacity. The private placement memoranda also described Swickle as a sophisticated businessman with experience in mergers and acquisitions and in building a major marketing organization. In fact, Swickle had no such experience. Finally, the private placement memoranda represented that Swickle was receiving no salary or other compensation for his work at UCG. In fact, Swickle diverted approximately $224,000 of corporate funds to his personal accounts and used additional corporate funds to pay for personal expenses.
In addition, Swickle made oral misrepresentations to investors while soliciting investments by telephone. For example, Swickle told investors that UCG shares would soon trade publicly and that, once public, the company's shares would hit certain price levels. In fact, UCG had not taken substantial steps to have its stock trade publicly, and there was no reasonable basis to predict that the stock price would rise to the unrealistic levels Swickle predicted.
Swickle made a number of false statements in a tape-recorded conversation with an FBI agent posing as a prospective investor. Among those statements was the following, "[T]here's a lot of games in this, we don't play any of them…all money under management is audited every month…99% of your money will go into marketing. That's the way it's really, that's the way it's done, it's not going into anybody's pocket. It's being spent to strengthen the company."
The complaint charges Swickle and UCG with violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctions against Swickle and UCG, and seeks disgorgement and a civil penalty from Swickle.
This case is the result of cooperation between the Division of Enforcement's broker-dealer examination staff, the FBI, United States Attorney's Office for the Southern District of New York and the CFTC.
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