U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18481 / December 2, 2003
SECURITIES AND EXCHANGE COMMISSION V. MILLENNIUM CAPITAL HEDGE FUND, L.P., MILLENNIUM CAPITAL GROUP, LLC, AND ANDREAS F. ZYBELL, Civil Action No. CV-03-1862-PHX-FJM (D. Ariz.)
The Securities and Exchange Commission ("Commission") announced that on November 18, 2003, the Honorable Frederick J. Martone, United States District Judge for the District of Arizona, issued judgments, based on consents, against Millennium Capital Hedge Fund, L.P. ("Millennium"), Millennium Capital Group, LLC ("MLLC"), and Andreas F. Zybell.
The Commission's complaint, filed on September 25, 2003, alleged that Millennium, based in Arizona, sought to raise $5 million through the sale of limited partnership interests. As alleged in the complaint, the defendants raised at least $1.4 million, including $697,000 since June 30, 2003, from investors in Arizona, California, Illinois, Iowa, New Mexico, Pennsylvania, and Utah. The complaint also alleged that the defendants represented that MLLC and Zybell would use investor funds to trade securities for Millennium, including publicly traded stocks and options. The complaint further alleged that the defendants falsely represented to investors that Millennium achieved a 46% return for the twelve months ended June 30, 2003, when, in fact, Millennium had a substantially lower rate of return.
The judgments prohibit Millennium, MLLC, and Zybell from committing securities fraud in violation of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgments also prohibit MLLC and Zybell from committing securities fraud in violation of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Furthermore, the judgments prohibit each of the defendants from violating the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act. The judgments also prohibit Millennium from violating the investment company registration provision of Section 7(a) of the Investment Company Act of 1940. Millennium, MLLC, and Zybell consented to the entry of the judgments without admitting or denying the Commission's allegations, although the allegations of the complaint are deemed to be true for the purposes of determining disgorgement and penalties. The appropriateness and amounts of disgorgement and civil penalties are to be determined by the court at a later date.