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U.S. Securities and Exchange Commission

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20484 / March 10, 2008

U.S. v. Brad A. Weaver, United States District Court for the Northern District of Illinois Criminal Case No. 04 CR 1113

SEC v. Brad A. Weaver, et al., United States District Court for the Northern District of Illinois Civil Action No. 04 C 8279

Defendant in SEC Enforcement Action Sentenced in Related Criminal Case

The Commission announced today that on February 20, 2008, the Honorable John W. Darrah, U.S. District Court Judge for the Northern District of Illinois, sentenced Brad A. Weaver to twelve years and seven months in prison for his role in a fraudulent investment scheme that raised $22.6 million from 87 investors. The Court also sentenced Weaver to three years of supervision following his release from prison and ordered him to pay restitution of $22.6 million. Weaver pled guilty to one count of violating the federal wire fraud statute.

In a related civil case, on December 23, 2004, the Commission filed a complaint against Weaver and his company, Beta Asset Management, Inc., alleging they violated Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder by, among other things, telling investors that they could profitably trade in the "error accounts" of a broker-dealer at no risk. The so-called error account trading strategy did not and could not have existed. The Complaint also alleged that the Defendants repeatedly delayed making requested payouts to existing investors until they raised money from new investors, as in a ponzi scheme. On February 3, 2006, the Court entered an order permanently enjoining Weaver and Beta Asset from violating the antifraud provisions of the federal securities laws. On April 10, 2006, the Commission barred Weaver from association with any broker, dealer or investment adviser. Weaver consented to the entry of both orders. The Court has appointed a receiver to collect assets, including profits unjustly realized by certain investors. The administration of the receivership is ongoing.

For further information, see Litigation Release Nos. 19015 (December 27, 2004), 19021 (January 4, 2005), 19559 (February 9, 2006) and SEA Release No. 53627 (April 10, 2006).

 

http://www.sec.gov/litigation/litreleases/2008/lr20484.htm


Modified: 03/10/2008