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U.S. Securities and Exchange Commission


Litigation Release No. 20741 / September 25, 2008

Securities and Exchange Commission v. Anthony A. James and James Asset Advisory, L.L.C., Case No. 08-61516-CIV-ALTONAGA/BROWN (S.D. Fla. filed September 24, 2008)

SEC Charges South Florida Investment Adviser With Multi-Million Dollar Misappropriation and Ponzi Scheme

On September 24, 2008, the Securities and Exchange Commission filed a civil injunctive action in the United States District Court for the Southern District of Florida against James Asset Advisory, L.L.C. (James Asset), an investment advisory firm, and its principal, Anthony A. James, for misappropriating client funds and operating a Ponzi scheme.

The Commission's complaint alleges that from at least April 2001 through January 2008, the Defendants received at least $5.2 million from at least 44 clients who were told by the Defendants that client monies would be invested in stocks, bonds, and mutual funds. According to the complaint, the Defendants never invested any client funds in the stock market or other investments. Instead, James misappropriated at least $2.4 million in client monies to fund his lavish lifestyle, including the purchase of a six-bedroom, 5,000 square foot home, a luxury condominium, a Porsche sports car, and season tickets to the Miami Heat games. Moreover, like a classic Ponzi scheme, the Defendants transferred approximately $2.8 million from new clients to existing clients to repay principal or to create the illusion of profitable trading. In addition, to facilitate and otherwise conceal their fraud, the complaint alleges that the Defendants provided clients with false account statements reflecting securities holdings and returns that did not exist.

The Commission's complaint charges James and James Asset with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.

Upon the filing of the Commission's complaint, and without admitting or denying the allegations in the complaint, James and James Asset consented to the entry of a judgment permanently enjoining them from violating the above-mentioned provisions of the federal securities laws. The judgment also orders the Defendants to pay disgorgement with prejudgment interest and civil money penalties, the amounts of which will be determined by the Court at a later date.

SEC Complaint in this matter



Modified: 09/25/2008