Litigation Release No. 19681 / May 2, 2006

Securities and Exchange Commission v. Barry A. Bingham and Bingham Capital Management Corporation, Civil Action No. 1:05-CV-02187 (TWT)

On April 21, 2006, Thomas W. Thrash, U. S. District Judge for the Northern District of Georgia, entered a Default Judgment against defendants Barry A. Bingham (Bingham) and Bingham Capital Management Corporation (Capital Management) restraining and enjoining them from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, and Rule 10b-5 thereunder. The Court also ordered each defendant to pay disgorgement, prejudgment interest and a civil penalty in the respective amounts of $1,011,795, $169,835 and $100,000.

The Commission's Complaint, filed on August 23, 2005, alleged that, from approximately April 2001 to November 2002, Bingham used misrepresentations and omissions of material fact to defraud at least 22 investors in Bingham Growth Partners, L.P. (Growth Partners), a hedge fund that Bingham created and managed through Capital Management, an unregistered investment adviser. Bingham offered and sold at least $1,826,218 of shares in the Fund, and at least $459,483 of these shares were offered and sold through Bingham's misrepresentations to investors about the Fund's past returns. Additionally, between July 2001 and November 2002, Bingham misappropriated approximately $141,637 in Growth Partners' assets, and by November 2002, the assets of Growth Partners had been wholly depleted by a combination of Bingham's trading losses and his misappropriations.

See also: L.R. 19345 (August 23, 2005)