U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23404 / November 10, 2015
Securities and Exchange Commission v. Bobby M. Collins, Civil Action No. 3:15-cv-3620-D (N.D. Tex. November 10, 2015)
SEC Charges Texas Man with Orchestrating Fraud Scheme Targeting Senior Investors
The Securities and Exchange Commission announced today that it has charged a Texas-based insurance agent with operating a multi-year offering fraud out of his insurance and retirement planning business.
According to the SEC's complaint, filed in the Northern District of Texas, Bobby M. Collins ("Collins"), a resident of Wichita Falls, TX, orchestrated a scheme targeting elderly investors through his unincorporated retirement planning business, Collins Insurance Companies a/k/a BMC Retirement Planning dating back to at least 2010. Collins lured at least 36 investors, most of whom are older than 65 years of age, to invest more than $4.6 million by offering high-yield, unsecured notes. Collins assured investors that he would use their funds to grow his business, and in turn pay significant returns to investors from new business generation and revenue growth.
The SEC's complaint alleges that Collins's promises were false and that he rarely used investor funds to expand his business, spending less than 2% of investors' funds for this purpose. Instead, he used investor funds on a number of personal expenditures, including mortgage and luxury car payments, and to make principal and interest payments to earlier investors. Collins kept the scheme alive for several years by relying on a stream of new and repeat investors, as well as two "personal loans" from a friend to avoid missing monthly payments to investors.
Collins has agreed to settle the SEC's action against him by consenting to an injunction against violations of Sections 5(a), 5(c), and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and agreeing pay disgorgement and prejudgment interest of $573,234.16, and a $160,000 civil penalty. The settlement is subject to court approval by the United States District Court for the Northern District of Texas.
The SEC's investigation was conducted by Scott Mascianica and Melvin Warren in the Fort Worth Regional Office, and supervised by Assistant Regional Director Eric Werner. The SEC's litigation will be led by Janie Frank.