Investment Adviser Settles SEC Fraud Charges

Litigation Release No. 24331 / November 2, 2018

Securities and Exchange Commission v. Charles A. Banks, IV, Civil Action No. 16-cv-3399-TWT (N.D. Ga.)

The Securities and Exchange Commission ("SEC") announced today that on November 1, 2018, the Honorable Thomas W. Thrash, Jr. of the United States District Court for the Northern District of Georgia entered final judgment against Charles A. Banks, IV, a former Atlanta-based investment adviser who the SEC alleged defrauded a former professional basketball player. By consent, the Court previously entered a judgment against Banks that enjoined him from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, Section 17(a) of the Securities Act of 1933, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. In the same judgment, the Court also imposed a permanent officer and director bar against Banks and deferred resolving the issues relating to monetary relief until a later date. In addition, the SEC had previously entered an order barring Banks from the securities industry.

As alleged in the SEC's complaint, Banks fraudulently induced the former professional athlete to invest $7.5 million in a sports team apparel and merchandise company based on a series of misrepresentations about the investment and allegedly misappropriated funds from his client.

To resolve the remaining monetary claims, Banks consented to a final judgment that orders him to pay a total of $6,328,155 in disgorgement and prejudgment interest, with those amounts deemed satisfied by Banks's payment of restitution in a parallel criminal case. In United States v. Charles Augustus Banks, IV, Criminal A. No. 2016-cr-618-FB (W.D. Tx.), Banks pled guilty to defrauding the same former professional athlete involved in the SEC's case. The Court sentenced Banks to 48-months of imprisonment and ordered him to pay $7.5 million in restitution. As a result of the sentence in the parallel criminal case, the SEC agreed to forgo a civil penalty against Banks.

The SEC's litigation was handled by Graham Loomis and H.B. Roback of the SEC's Atlanta Regional Office.