U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23672 / October 7, 2016
Securities and Exchange Commission v. James T. Bramlette and The Pelorus Group, LLC, 16-CV-07493 (C.D. Cal. filed October 6, 2016)
SEC Seeks Court Order Requiring the Pelorus Group and Its Owner to Produce Documents
The Securities and Exchange Commission filed a subpoena enforcement action in U.S. District Court for the Central District of California on October 6, 2016 against the Pelorus Group, LLC ("Pelorus Group") and its owner, James T. Bramlette, for failing to produce documents related to the SEC's investigation into possible violations of the federal securities laws by a business known as Private Placement Capital Notes II, LLC ("PPCN").
According to the SEC's application and supporting papers, over the last five years PPCN sent over $22 million in investor funds to the Pelorus Group, which is based in Salt Lake City, Utah. However, the SEC alleges that PPCN has not received any return on its investment. The SEC states that the money was supposed to be invested in a resort on Daufuskie Island in South Carolina. The SEC's application states that PPCN investors have not been paid since 2014.
According to the SEC, the staff in the SEC's Los Angeles Regional office served the Pelorus Group and Bramlette with subpoenas on July 25, 2016 as part of the SEC's investigation. The subpoenas sought documents regarding the Pelorus Group's books and records, as well as documents regarding the resort on Daufuskie Island. According to the SEC, the Pelorus Group and Bramlette are in possession of documents relevant to the SEC's investigation but they have refused to produce many of these documents to the SEC despite repeated efforts to secure compliance with the SEC's subpoenas.
Pursuant to its application filed in federal court, the SEC seeks a court order directing the Pelorus Group and Bramlette to show cause why the court should not enter an order requiring them to produce documents responsive to the SEC administrative subpoenas. The SEC is continuing its fact-finding investigation and, to date, has not concluded that anyone has violated the federal securities laws.