U. S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21566 / June 22, 2010
Securities and Exchange Commission v. Anthony T. Banas, Civil Action No. 10 cv 3877 (N.D. Ill. June 22, 2010)
The U.S. Securities and Exchange Commission (Commission) announced that on June 22, 2010, it filed a complaint in the U.S. District Court for the Northern District of Illinois against Anthony T. Banas (Banas), a co-founder and former Chief Technology Officer of privately-held Canopy Financial, Inc. (Canopy), for engaging in a scheme to defraud investors in a $75 million private placement offering and for misappropriating investor funds. The Complaint alleges that:
Banas, directly and with co-founder Jeremy J. Blackburn (Blackburn), provided unsuspecting investors with forged bank account statements that misrepresented Canopy's financial condition;
Banas arranged and executed a client conference call for an investor in the due diligence process with a Canopy employee posing as the client; and that
Banas failed to inform investors that Canopy was not operating profitably before the 2009 Canopy Offering.
In addition to seeking a permanent injunction against Banas for violating the antifraud provisions of the Securities Act of 1933 [Section 17(a)] and the Securities Exchange Act of 1934 [Section 10(b) and Rule 10b-5 thereunder], the Commission's Complaint seeks the disgorgement of ill-gotten gains, plus prejudgment interest thereon, and a civil penalty.
Banas, a resident of Chicago, IL, has offered to settle the charges against him without admitting or denying the allegations. The Commission and Banas have filed a motion with the District Court seeking entry of an Order of Final Judgment imposing a permanent injunction against Banas, ordering Banas to pay $975,548.25 in disgorgement and $32,910.45 in prejudgment interest thereon, and a civil penalty in an amount to be determined by the Court at a later date.
The Commission first filed a related emergency action against Canopy and Jeremy J. Blackburn (Blackburn) on November 30, 2009. SEC v. Canopy Financial, Inc., et al., Case No. 09-CV-7429, USDC, N.D.IL (LR-21324).
The Commission's investigation is continuing. The Commission acknowledges the assistance of the U.S. Attorney's Office of the Northern District of Illinois in this matter.