UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16496 \ March 31, 2000
Securities and Exchange Commission v. Highland Financial Corporation, et al. #4-99-CV-0719-D, USDC, NDTX (Fort Worth Division)
The U.S. Securities and Exchange Commission ("Commission") announced today that on March 28, 2000, Judge Sidney A. Fitzwater, United States District Judge for the Northern District of Texas, entered a Final Judgment of Permanent Injunction and Other Equitable Relief against Defendant Robert H. Alberding. Judge Fitzwater permanently enjoined Mr. Alberding from future violations of the antifraud provisions of the federal securities laws. Judge Fitzwater further ordered Mr. Alberding to pay disgorgement of $125,000, representing his gains from the conduct alleged in the Commission's Complaint, and pay prejudgment interest of $4,986.20. In addition, Mr. Alberding is ordered to pay a $10,000 civil money penalty.
On September 2, 1999, Judge Fitzwater granted the Commission's request for an emergency asset freeze, the appointment of a Receiver, and other equitable relief to halt a fraudulent "prime bank" investment scheme. The Commission's Complaint charges that from April 1998 through August 1998, Kay L. Cahill, a convicted felon, and the other defendants, raised approximately $9.5 million from 10 investors nationwide for a purported "trading program" in foreign bank instruments promising returns of as much as 1,000%. In reality, the trading program did not exist and investor funds were used to make "Ponzi" payments, in that funds from later investors were used to pay purported profits to earlier investors. In addition, investor funds were misappropriated for certain defendants' personal use. For example, Cahill purchased an 11,000-square-foot house in Tyler, Texas, at a cost of approximately $1.2 million, and spent investor funds for moving and travel expenses, and to purchase furniture and automobiles.
According to the Commission's Complaint, Mr. Alberding, age 50 and a resident of Scottsdale, Arizona, is a self-employed sales and marketing consultant who conducted business under the name CanAmerican Business Capital, Inc. Alberding's role in the fraud was to solicit investors for the investment program in exchange for commissions.