U.S. Securities and Exchange Commission
Litigation Release No. 22492 / September 24, 2012
SEC v. Rudolf D. Pameijer, et al., United States District Court for the Southern District of Indiana (Case No. 1:12-CV-01364) (S.D. In.)
SEC CHARGES FOUR DEFENDANTS IN FRAUDULENT INVESTMENT SCHEME
The Securities and Exchange Commission today filed a complaint in the United States District Court for the Southern District of Indiana, charging Rudolf D. Pameijer, Lindsay R. Sayer, Ryan W. Koester and his entity Rykoworks Capital Group, LLC ("Rykoworks") with running a fraudulent investment scheme. The complaint alleges that the defendants in this scheme misappropriated nearly $1.7 million from investors.
As alleged in the complaint, Koester held himself out as an expert foreign currency trader, and falsely represented to investors that his unique trading strategy offered investors a principal guaranteed investment opportunity. As alleged in the complaint, Koester and Pameijer, a career insurance salesman, agreed to a profit sharing arrangement for clients Pameijer brought to Rykoworks. The complaint alleges that, starting in 2010, Pameijer and his daughter, Sayer, began soliciting clients to invest with Rykoworks through promissory notes which purported to guarantee investor principal while offering risk free returns from forex trading.
As alleged in the complaint, Pameijer and Sayer misappropriated the majority of funds they raised from investors for personal use. The complaint alleges that Pameijer used investor money to pay for luxury automobiles, a motorcycle, a boat, home renovations, his son's college tuition, and Sayer's wedding and honeymoon in St. Lucia. The complaint further alleges that Sayer used investor money to pay rent and wedding expenses, and for other personal expenditures. According to the complaint, the remaining investor funds Pameijer and Sayer transferred to Koester and Rykoworks, and additional funds Koester raised from investors directly, Koester depleted through trading losses and misappropriation of funds for personal expenses. The SEC alleges that, as part of the scheme, each of the proposed defendants made materially false representations to investors, including providing investors with false account statements and information.
By engaging in this conduct, the SEC alleges that each of the defendants violated Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. In addition, the complaint alleges that Pameijer and Sayer violated Section 15(a) of the Exchange Act by acting as unregistered brokers. The SEC action seeks injunctions, disgorgement with prejudgment interest, and civil monetary penalties.
Pameijer and Sayer have agreed to judgments, which are subject to Court approval, that permanently enjoin them from violating Section 17(a) of the Securities Act, and Sections 15(a) and 10(b) of the Exchange Act and Rule 10b-5 thereunder, and provide that upon subsequent motion the Court will determine issues relating to monetary relief. In addition, Pameijer and Sayer each have consented to a Commission order, pursuant to Section 15(b)(6) of the Exchange Act, barring them from future association with any investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization; and barring them from participating in any offering of a penny stock.
Koester and Pameijer also are subject to pending Indiana state criminal charges. The SEC thanks the Indiana Division of Securities for its assistance in this matter.