U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20061 / March 29, 2007
SEC v. First United Financial Group, LLC, et al., Civ. Action No. 1:04-cv-1601-CKK (United District Court for the District of Columbia) (Judge Kollar-Kotelly)
Robert L. Hall, Jr. Consents to Permanent Injunctions
On February 6, 2007, United States District Judge Colleen Kollar-Kotelly entered a final judgment by consent against Robert L. Hall, Jr., in an action that the SEC filed in the United States District Court for the District of Columbia in 2004.
The Commission's complaint alleges that, from at least June 2001 until August 2003, Hall, acting through First United Financial Group, LLC, offered and sold securities called "Asset Placement Agreements" in unregistered transactions to more than 150 investors in at least 18 states. Through cold calls, seminars, sales agents and newspaper advertisements, First United raised over $1.38 million. In connection with the offer and sale of securities, Hall made misrepresentations and omissions of material fact to investors concerning, among other things, the use of investor funds, expected returns, and the investment risks. He also made misrepresentations that the funds raised would be invested in real estate in Washington, DC to assist lower and moderate income residents in a "friendly real estate development system" to assist residents who might be displaced "by the market pressures of gentrification." In fact, investors' funds were not invested in real estate projects in Washington, DC or elsewhere.
The final judgment, to which Hall consented, permanently enjoins Hall from violations of the registration provisions of the federal securities laws contained in Section 5 of the Securities Act of 1933 ("Securities Act"), and from violations of the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In addition, the final judgment includes a conduct-based injunction that permanently enjoins Hall from participating in unregistered offers or sales of securities. Based on the criminal action described below, the Commission did not require Hall to pay disgorgement or penalties as part of the settlement. The Court's order concludes this litigation.
In a parallel criminal proceeding, United States v. Robert L. Hall, Jr., No. 1:05-cr-00030-HHK (D.D.C), Hall was on March 3, 2006, convicted on 18 criminal counts related to the conduct alleged in the Commission's complaint. On December 7, 2006, Hall was sentenced to serve incarceration of 188 months, three years of supervised release, and to pay $713,924 in restitution.
For additional information, see Litigation Release No. 18886 (September 15, 2004) and Litigation Release No. 19860 (October 6, 2006).