UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22069 / August 18, 2011
SECURITIES AND EXCHANGE COMMISSION v. WESTMOORE MANAGEMENT, LLC, WESTMOORE INVESTMENT, L.P., WESTMOORE CAPITAL MANAGEMENT, INC., WESTMOORE CAPITAL, LLC, and MATTHEW JENNINGS, Civil Action No. SACV 10-849-AG (MLGx) (Central District of California, Complaint filed June 15, 2010)
COURT ENTERS JUDGMENTS AGAINST OPERATORS OF MULTI-MILLION DOLLAR SECURITIES FRAUD
The Securities and Exchange Commission announced that on August 12, 2011, the United States District Court for the Central District of California entered judgments against Westmoore Management, LLC, Westmoore Investment, L.P., Westmoore Capital Management, Inc., Westmoore Capital, LLC, (collectively, the “Westmoore Entity Defendants”) and Matthew Jennings, who served as the CEO and general partner of the corporate defendants.
The Commission’s complaint, filed on June 15, 2010, alleged that Jennings operated an undisclosed Ponzi-like fraudulent scheme through the Westmoore Entity Defendants and their subsidiaries in violation of the federal securities laws. The complaint also alleged that the defendants raised over $53 million in 2008 in multiple offerings, one of which promised returns as high as 130% annually.
The Commission alleged that the defendants misrepresented its offerings to potential investors by (1) promising high periodic returns, (2) lying about their use of offering proceeds, and (3) misleading investors about the performance of their investments and businesses. The Commission also alleged that Jennings directed the company’s accountants to operate a corporate shell game in which the various Westmoore bank accounts were treated as one integrated account from which funds, regardless of their source, could be used to pay promised returns.
Without admitting or denying the Commission’s allegations, except as to jurisdiction, Jennings and the Westmoore defendants consented to the judgments, which permanently enjoin them from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The judgment against the Westmoore Entity Defendants also orders (1) disgorgement of ill-gotten gains and prejudgment interest in an amount to be determined by the Court and (2) the appointment of a permanent receiver over the Westmoore Entity Defendants’ assets. The final judgment against Jennings also (1) orders him to pay a civil penalty of $130,000 and disgorgement and pre-judgment interest totaling $362,265.06 and (2) bars him from serving as an officer or director of any publicly-traded company for a period of five years. Investors with questions may contact the permanent receiver, David A. Gill, at (310) 277-0077.