SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16318 / September 30, 1999
SECURITIES AND EXCHANGE COMMISSION V. FIRST SPRINGFIELD SECURITIES, INC., DONALD RADLE AND MICHAEL DWYER, CIVIL ACTION NO. 99-3356-CV-S-RGC (W.D.MO.)
The Securities and Exchange Commission (Commission) announced that, on September 28, 1999, it filed a Complaint in the United States District Court for the Western District of Missouri against First Springfield Securities, Inc. (FSSI), its former president, Donald E. Radle (Radle), and a former registered representative, Michael S. Dwyer (Dwyer), alleging that they violated the antifraud provisions of the federal securities laws in connection with the offer, purchase and sale of securities through FSSI.
The Commission's complaint alleges that, from approximately November 1997 through April 1998, FSSI and Radle, the 65 year old former president of FSSI who lives in Springfield, Missouri, raised at least $4 million from investors by offering and selling securities which purportedly were backed by collateral and offered extraordinary returns. In addition, the Complaint alleges that FSSI and Radle represented to investors that investor funds would be placed in designated accounts for the benefit of the investor and would not be released for any purpose until FSSI obtained collateral in the form of United States Treasury Bonds or "Bank Guaranteed Payment Directives." The Complaint further alleges that investors were promised high annual returns, ranging from 50% to an extraordinary 720%, from their investments with FSSI.
The Complaint alleges, however, the representations made to investors were false. FSSI and Radle never placed investor funds in accounts designated for the benefit of investors, never obtained or held the collateral promised to the investors, and directed investor funds to accounts neither Radle nor FSSI controlled. In addition, FSSI and Radle misrepresented the rates of return because Radle, as president of FSSI, did not have any legitimate basis for believing that the returns could be produced. Radle knew this was false because he did not obtain critical information about how the rates of return would be generated. The Complaint also alleges that most of the investors lost all, or nearly all, of their money.
In addition, the Complaint alleges that Dwyer, a 49 year old former registered representative at FSSI, attempted to obtain investor funds for the fraudulent scheme from two elderly sisters. The Complaint alleges that Dwyer met with two elderly sisters in a nursing home and attempted, under false pretenses and without their consent, to obtain $300,000 held in the sisters' trusts for investment in the fraudulent scheme offered through FSSI. In the alternative, the Complaint alleges that, even if the sisters agreed to invest through FSSI, Dwyer misrepresented to the sisters the safety of the investments, the use of investor proceeds and the rates of return.
The Commission seeks permanent injunctions against FSSI, Radle and Dwyer, prohibiting further violations of the antifraud provisions of the Securities Act of 1933 and Securities Exchange Act of 1934. The Complaint also demands that FSSI disgorge any ill-gotten gains. Finally, the Complaint demands that FSSI, Radle and Dwyer pay civil monetary penalties for their fraudulent conduct.
The Commission wishes to thank the NASD and the Missouri Secretary of State's Securities Division for their assistance in this matter.