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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21184 / August 26, 2009

United States Securities Exchange Commission v. Titan Wealth Management, LLC, Point West Partners, LLC, and Thomas Lester Irby II, Defendants, and Joseph Romanow, David Romanow, Karen Bowie, France Michaud, John J. Kim, and Pegasus Holdings Group, Inc., Civil Action No. 4:09-cv-418 (E.D. Tx)(August 25, 2009)

SEC Charges Texas Investment Adviser for Operating a Ponzi Scheme

On August 25, 2009, the Securities and Exchange Commission ("Commission") filed an emergency civil injunctive action against Thomas Lester Irby II, Titan Wealth Management, LLC, and Point West Partners, LLC for their roles in defrauding over thirty advisory clients by selling fictitious interests in what Irby claimed were European Mid-Term Notes (MTNs).

The Commission's complaint alleges that beginning in 2007 and continuing through the present, Irby, Titan, a Commission-registered investment adviser, and Point West, raised over $3.1 million from over 30 of Titan's advisory clients. Irby told investors that he would pool their funds to purchase an MTN or an interest in an MTN, with promised short-term returns ranging from 10% to 50%. The Commission's complaint further alleges that, contrary to representations to investors, the defendants did not pool investor funds to purchase any interest in an MTN. Instead, Irby and Titan misappropriated at least 80% of investor funds for personal use, to make Ponzi payments to certain investors, and for transfer to the relief defendants for no apparent consideration.

The Commission's complaint, filed in United States District for the Eastern District of Texas, alleges that Irby, Titan and Point West 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, and that Irby and Titan violated Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The Commission's complaint also names Joseph Romanow, David Romanow, Karen Bowie, France Michaud, John J. Kim, and Pegasus Holdings Group, Inc. as relief defendants.

The Commission seeks a temporary restraining order, asset freeze, accounting, an order preserving documents, and expedited discovery against each defendant. The Commission also seeks preliminary and permanent injunctions against further violations of the securities laws, disgorgement plus prejudgment interest, and civil money penalties from each defendant. The Commission also seeks to recover investor funds improperly obtained by the relief defendants.

 

http://www.sec.gov/litigation/litreleases/2009/lr21184.htm


Modified: 08/26/2009