U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19658 / April 17, 2006
SEC v. David L. McMillan, CV-06-0951-PCT-SMM (D. Ariz. 2006)
The Commission filed an action in the United States District Court for the District of Arizona on April 4, 2006 against David L. McMillan ("McMillan") seeking an immediate ex parte asset freeze, an accounting, a preliminary injunction, a permanent injunction, disgorgement with prejudgment interest, and third tier civil penalties. From 1994 through 2005, McMillan operated as investment adviser and broker in Bullhead City, Arizona. McMillan now resides in Costa Mesa, California. The complaint alleges that from 1999 through October 2005, McMillan defrauded at least 21 investors out of at least $2.6 million through the offer and sale of fictitious investments in annuities, loans to a real estate developer, and real estate loans that were to be secured by first deeds of trust. The complaint also alleges that McMillan used the money either for his own personal use or to pay other investors. Many of McMillan's victims are retirees.
On April 4, 2006, the District Court entered an order granting the Commission's motion for an asset freeze and for an accounting by McMillan. On April 13, 2006, the Court granted the Commission's motion for a preliminary injunction enjoining McMillan from violating Section 206 of the Investment Advisers Act of 1940, Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934. The Court also extended the asset freeze and ordered McMillan to provide a sworn accounting by April 27, 2006.