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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23737 / February 1, 2017

Securities and Exchange Commission v. Patric Ken Baccam, Civil Action No. 5:17-00172 (C.D. Cal. filed Jan. 31, 2017)

SEC Charges Patric Ken Baccam with Fraudulent Offering and Sale of Securities

The Securities and Exchange Commission today announced that, on January 31, 2017, the Commission filed a civil action in U.S. District Court for the Central District of California against Patric Ken Baccam, alleging that he conducted a fraudulent offering and sales of securities, and that he acted as an unregistered broker by selling some of those securities away while associated with, and failing to disclose the sales to, Centaurus Financial, Inc., a dually-registered broker-dealer and investment adviser. Baccam is a resident of Highland, California.

The Commission's complaint alleges that, from October of 2010 through July of 2013, Baccam raised approximately $963,000 through the offer and sale of unsecured promissory notes to 18 brokerage customers and family members, representing the notes would be used to fund a venture "flipping" real estate for a profit. According to the complaint, in connection with the offer and sales of some of those notes, Baccam knowingly or recklessly made multiple fraudulent statements regarding the safety of the investments, the promised returns on investment, the use of investor funds, and the nature and experience of the issuers. The complaint also alleges that Baccam engaged in a scheme to defraud investors, by, among other conduct, using newly-invested funds to make interest payments owed to earlier investors, to give investors the appearance that his real estate venture was profitable and induce further investment.

The Commission's complaint alleges that Baccam violated Section 17(a) of the Securities Act of 1933, as well as Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctive relief (including a conduct-based injunction), disgorgement plus prejudgment interest, and civil penalties against Baccam. The complaint also names as relief defendants, and seeks disgorgement plus prejudgment interest from, two of the note issuers, Prim Group LLC and Precision Research Group LLC, both of which Baccam controlled throughout the relevant period.

The SEC's investigation was conducted by Nicholas C. Margida, with assistance from Deborah L. Russell, and was supervised by David Frohlich. The litigation will be led by Matthew F. Scarlato and Amy J. Longo, and will be supervised by Jan M. Folena. The SEC appreciates the assistance of the Financial Industry Regulatory Authority.

SEC Complaint

 

https://www.sec.gov/litigation/litreleases/2017/lr23737.htm


Modified: 02/01/2017