U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19877 / October 18, 2006
SEC v. Gari Aldridge et al., 06-CV-5645 (United States District Court for the Northern District of Illinois)
The Securities and Exchange Commission filed a complaint in the United States District Court for the Northern District of Illinois against Gari Aldridge, Tracey Aldridge, Century Financial Services, and James Casmay, an unregistered broker, for violating Section 17(a) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and against Casmay for also violating Section 15(a) of the Exchange Act. The complaint alleged that the Aldridges recruited Casmay and another individual to sell purported alternative certificates of deposit (CDs). The complaint alleged that these defendants sold $1.7 million worth of these alternative CD's to 16 investors who were primarily senior citizens and individuals who spoke limited English. The complaint further alleged that the defendants solicited the investors by representing to them that the alternative CDs paid a guaranteed 6% annual return and that they were FDIC insured. The complaint also alleged that, in reality, the Aldridges used new investor money to pay the purported guaranteed returns to other investors, to pay their personal expenses, to attempt to run an undisclosed high-risk mortgage business, and to pay undisclosed commissions to Casmay. The Commission is seeking permanent injunctions and disgorgement of ill-gotten gains, plus prejudgment interest, from all of the defendants, and civil penalties from the Aldridges and Casmay.
The SEC's Midwest Regional Office and the United State's Attorney's Office for the Northern District of Illinois conducted parallel investigations of this matter and, simultaneous with the Commission's announcement of the above action, the United States Attorney's Office announced the filing of six counts of wire fraud charges against the Aldridges and Casmay.