U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20780 / October 16, 2008
SEC v. Wayne F. Gorsek, et al., No. 99-CV-3072-JES (C.D. Ill.)
The Securities and Exchange Commission announced today the completion of a $272,037.33 Fair Fund distribution to defrauded customers of Strategic Investments, Inc. (SII), a now-defunct broker-dealer based in Springfield, Illinois. The defendants were the owners and associates of Strategic Investment Advisory, Inc. (SIA), a stock promoter that falsely claimed to provide independent recommendations about microcap companies. As the U.S. District Court for the Central District of Illinois concluded, registered representatives at SII defrauded customers by recommending the purchase of securities that SIA had been paid to tout, without disclosing that material fact to their brokerage customers.
On February 20, 2008, the Honorable Jeanne E. Scott, U.S. District Judge for the Central District of Illinois, approved the Commission's Distribution Plan and appointed one of the Commission's attorneys as Distribution Agent and Tax Administrator, given the small size of the Fair Fund. Following a claims process conducted by Commission attorneys, Judge Scott granted the Commission's motion to disburse the Fair Fund to Eligible Claimants on September 24, 2008.
In 2002, the SEC obtained judgments against Wayne F. Gorsek, Lyndell F. Parks and P. Brenden Gebben. The Court had previously granted the Commission's motion for summary judgment against defendants Gorsek and Parks and held them liable — as co-owners of SIA — for violations of the antifraud and anti-touting violations of the federal securities laws. After a jury trial, defendant Gebben was also found liable for violations of the antifraud and anti-touting violations of federal securities laws. Finally, after a bench trial, the Court again found defendant Gorsek liable — as a principal of SII — of defrauding his brokerage clients at SII. For more information about the SEC's action, please see Litigation Release Nos. 16018 (Jan. 7, 1999), 17010 (May 18, 2001), 17352 (Feb. 5, 2002), and 17953 (Jan. 28, 2003).