Investment Advisers Act of 1940
Release No. 2231 / April 29, 2004
Admin. Proc. File No. 3-11467
In the Matter of Joseph L. Norris and Mark G. Coleman
The United States Securities and Exchange Commission announced today that it has instituted a public administrative proceeding pursuant to Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act) to determine what, if any, remedial action is appropriate based on the entry of injunctions against Joseph Norris and Mark Coleman for violations of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act), Rule 10b-5 thereunder, and Section 206 the Advisers Act. From July 1998 through 2000, Norris and Coleman raised approximately $8.5 million from more than thirty clients by promising to invest the money in offshore "trading programs" that would generate returns of four to seven percent per month, or the equivalent of 48 to 84 percent per year. Norris and Coleman lost approximately $6 million of their clients' funds in their attempts to invest in such "trading programs," then sent their clients fictitious account statements concealing the losses. Norris and Coleman continued to encourage clients and prospective clients to deposit money with them without disclosing the losses.
On December 24, 2002, the Honorable David W. Hagen, United States District Judge for the District of Nevada, granted the Commission's motion for summary judgment as to Norris and Coleman. On February 18, 2003, the Court entered a final judgment against Norris and Coleman, permanently enjoining them from violating the aforementioned provisions of the Exchange Act and the Advisers Act, ordering them (jointly and severally) to pay disgorgement and prejudgment interest of $6,900,251.59, and ordering each of them to pay a civil penalty in the amount of $120,000.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide the Respondents an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions are appropriate and in the public interest.
The Order requires the Administrative Law Judge to issue an initial decision no later than 210 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice.