U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21455 / March 19, 2010
Securities and Exchange Commission v. M. Mark McAdams and R. Dane Freeman, Civil Action No. 4:10-cv-00701-TLW (D.S.C. March 18, 2010)
On March 18, 2010, the Securities and Exchange Commission (“Commission”) filed a Complaint for Injunctive and Other Relief (“Complaint”) in the United States District Court for the District of South Carolina against M. Mark McAdams (“McAdams”) and R. Dane Freeman (“Freeman”). The Complaint sets forth a fraudulent high yield investment scheme operated by McAdams and Freeman, in which they raised over $3.5 million from approximately 35 investors.
The Complaint alleges that during the first nine months of 2008, McAdams and Freeman enticed investors by promising that their firm Global Holdings LLC (“Global Holdings”), or a German entity would generate returns as high as 4900% in two months by trading AA and AAA rated bonds and/or medium term notes. The defendants misrepresented that Global Holdings itself would invest $3 million in the bonds and/or medium notes, and misrepresented that they had earned hundreds of millions of dollars in such trading. The Complaint also alleges that McAdams was an attorney at a South Carolina law firm where he used his firm’s e-mail system and letterhead, without the firm’s knowledge, in the perpetration of the fraud. Neither Global Holdings nor the German entity ever purchased or sold the bonds and/or the medium term notes, and no returns were ever generated for the investors. The Complaint further alleges that Freeman misappropriated investors’ money by diverting it to his family, to a colleague’s girlfriend, to paying Freeman’s debts, and by payments to other investors.
The Complaint alleges that McAdams and Freeman have violated the antifraud provisions of the federal securities laws, 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. The Commission’s Complaint seeks (i) permanent injunctions against future violations; (ii) disgorgement of ill-gotten gains plus prejudgment interest; and (iii) imposition of civil penalties.
The Commission thanks the South Carolina Securities Division for its assistance in this matter.
See Also: SEC Complaint