U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 22668 / April 8, 2013
Securities and Exchange Commission v. Matthew John Ryan, et al., Civil Action No. 1:10-CV-00513
The Securities and Exchange Commission (“Commission”) announced that on April 3, 2013, Chief Judge Norman A. Mordue entered a final judgment, against Prime Rate and Return, LLC (“Prime Rate”), individually and doing business as American Integrity Financial Company, in SEC v. Matthew John Ryan, et al. The Commission’s complaint alleges that Prime Rate defrauded investors through a multi-million dollar Ponzi scheme operated in the Albany-Troy area by Prime Rate’s sole owner and manager, Matthew Ryan.
Without admitting or denying the allegations of the complaint, Prime Rate, through its court-appointed receiver, Paul A. Levine, Esq., consented to the entry of a final judgment permanently enjoining it from violations of Sections 5(a), 5(c) 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 final judgment orders Prime Rate to pay disgorgement of $6.5 million and prejudgment interest of $616,662, but deems disgorgement satisfied by the $71,927 recovered by the receiver plus any additional amount the receiver recovers, after certain court-approved payments and fees, from the sale of a property in which Prime Rate owns an interest.
The Commission filed a complaint on May 3, 2010, alleging that from at least 2002, Ryan and Prime Rate, using a fictional entity called “American Integrity Financial Company” (“American Integrity”) had raised more than $6.5 million from investors — many of them elderly — by promising them “guaranteed” fixed rates of return ranging from 3.85% to 9% annually. Ryan obtained these investments by fostering the false impression that American Integrity was a legitimate, substantial financial services firm, with numerous employees and for which he was merely an employee, and by offering safe, even guaranteed, investments, including qualified individual retirement accounts (“IRAs”). To perpetrate this fraud, Ryan used devices such as a phony Manhattan address and fictitious names and titles of purported American Integrity employees. Ryan also misrepresented to investors that their investments were safe and insured by the Federal Deposit Insurance Corporation (“FDIC”) or the Securities Investor Protection Corporation (“SIPC”) and that American Integrity was qualified to offer IRAs and other tax-deferred investments.
The Commission’s case is still pending against Matthew Ryan. Ryan has been convicted of securities fraud in a criminal case arising out of the same conduct underlying the Commission’s case and has been barred by the Commission from the securities industry.