U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21484 / April 14, 2010
SEC v. Trevor G. Cook, Patrick J. Kiley, et al., Case No. 09-CV-3333 (D. Minn., filed November 23, 2009)
The Securities and Exchange Commission announced that on April 13, 2010, the Honorable James M. Rosenbaum of the United States District Court for the District of Minnesota accepted a guilty plea by Minneapolis-area resident Trevor G. Cook to one count of mail fraud and one count of tax evasion for his role in a $190 million foreign currency trading scheme involving at least 1,000 investors. For his crimes, Cook faces a potential maximum penalty of 20 years in federal prison on the mail fraud charge and five years on the tax evasion charge. His sentence will be determined at a future date. The U.S. Attorney's Office for the District of Minneapolis filed criminal charges against Cook on March 30, 2010.
Cook is one of the defendants in a pending civil injunctive action filed by the SEC on November 23, 2009 in the United States District Court for the District of Minnesota. The SEC's action against Cook arises out of the same facts that are the subject of the criminal case. The SEC's complaint alleges that from at least July 2006 through at least July 2009, Cook and co-defendant Patrick J. Kiley of Minneapolis, Minnesota, raised at least $190 million from at least 1,000 investors through the sale of unregistered investments in a purported foreign currency trading venture. According to the SEC's complaint, Cook and Kiley pooled investors' funds in bank and trading accounts in the names of entities they controlled. The SEC's complaint alleges that the foreign currency trading they did conduct resulted in millions of dollars in losses, and they misused approximately one half of the investor funds raised to make Ponzi-like payments to earlier investors and pay for, among other things, Cook's gambling losses and the purchase of the historic Van Dusen Mansion in Minneapolis. The SEC's complaint charges Cook and Kiley with violating Sections 5 and 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 Commodity Futures Trading Commission also filed an action on November 23, 2009, against Cook, Kiley and others for their roles in the scheme.
On November 23, 2009, the Court entered a preliminary injunction order against Cook and froze all of his assets. On January 25, 2010, the Court found Cook in civil contempt of the asset freeze order for failing to surrender more than $35 million in assets and ordered Cook jailed until he is in compliance with the Court's orders. Cook has not complied with those orders and remains incarcerated.
For additional information, see Litigation Release No. 21313 (November 25, 2009), Litigation Release No. 21344 (December 18, 2009), and Release No. 2010-12 (January 25, 2010)