SEC Charges Unregistered Colorado Broker-Dealer for Fraud Harming Seniors
SEC to Hold Seniors Summit on Monday to Educate Senior Investors
FOR IMMEDIATE RELEASE
Washington, D.C., Sept. 19, 2008 — The Securities and Exchange Commission today charged an unregistered broker-dealer and his company, Loveland, Colo.-based Global Marketing Consultants LLC, with misappropriating funds from seniors and other investors through two investment schemes.
The SEC's complaint, filed in U.S. District Court for the District of Colorado, alleges that David William Thomas, also of Loveland, Colo., and GMC raised approximately $6.3 million from more than 140 investors nationwide. However, they misrepresented the true nature of how the funds were invested. More than one-third of the investors are senior citizens.
"Senior citizens are respected and valued participants in the markets, and we are devoted to their protection," said George B. Curtis, Deputy Director of the SEC's Division of Enforcement. "We will pursue to the full measure of our powers anyone who abuses their trust."
The SEC has brought more than 50 enforcement actions during the past two years against frauds particularly harming retirees and other older investors. The dangers of senior fraud will be a focus of a Seniors Summit that the SEC will be holding on Monday in Washington, D.C. With more than 76 million Baby Boomers reaching the traditional age of retirement in the largest demographic wave in U.S. history, seniors are prime targets for scam artists and securities swindlers. The SEC's Seniors Summit will present tips and information to help senior investors ensure their retirement money is protected. [SEC Seniors Summit: Webcast Information].
The SEC's complaint in today's enforcement action alleges that Thomas and GMC represented that investor funds would be pooled into "non-depleting custodial" bank accounts and would be used only as collateral to fund a high-speed internet business and a global positioning system business. Thomas and GMC represented that the investments were fully insured and would generate a "high rate of return." According to the SEC's complaint, all of Thomas' and GMC's representations were false and misleading. Unbeknownst to the investors, the true nature of Thomas' plan was to use investors' money for prime bank trading programs.
The SEC's complaint charges Thomas and GMC with violating the antifraud and registration provisions of the federal securities laws, and seeks permanent injunctions. The SEC's complaint also charges Thomas with acting as an unregistered broker-dealer. Without admitting or denying the SEC's charges, Thomas and GMC each consented to the entry of the injunctions against them. Moreover, Thomas has been ordered to pay $4.4 million in restitution and sentenced to 42 months in prison in a related criminal action brought by the U.S. Attorney's Office for the District of Colorado.
The SEC acknowledges the assistance of the U.S. Attorney's Office for the District of Colorado and the Criminal Investigation Division of the Internal Revenue Service.
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For more information, contact:
Donald B. Hoerl
Acting Regional Director, SEC's Denver Regional Office
Mary S. Brady
Assistant Regional Director, SEC's Denver Regional Office