UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16555 / May 16, 2000
SEC SUES THREE SOUTH FLORIDA RESIDENTS CONNECTED TO FOREIGN CURRENCY TRADING FIRM; ALLEGES INVESTORS DEFRAUDED
Securities and Exchange Commission v. William S. Cordo, Mitchell S. Davis and John A. Blount, Civil Action No. 00-08392-CIV-Ryskamp (S.D. Florida, West Palm Beach Division) (complaint filed May 15, 2000)
On May 15, 2000, the Securities and Exchange Commission ("SEC") filed a complaint against three individuals in connection with a foreign currency trading program offered by International Currency Consultants, Inc. ("ICC") of Boca Raton, Florida. In its complaint, the SEC alleges that ICC's owners, William S. Cordo of Delray Beach, Florida and Mitchell S. Davis of Royal Palm Beach, Florida, sold unregistered securities to investors in the form of interests in ICC's trading program.
The complaint alleges that from about May 1998 to May 1999, ICC sold approximately $1.7 million worth of unregistered securities to investors using a boiler-room operation established by Cordo and Davis. According to the complaint, ICC, under the supervision and control of Cordo and Davis, hired approximately a dozen sales agents to staff its boiler-room operation, and engaged a "facilitating" firm which purportedly placed trades for ICC on the Forex or Interbank market. The complaint further alleges that ICC's top sales agent, John A. Blount, defrauded investors that he attracted to ICC's foreign currency trading program by misrepresenting facts regarding profits and losses in investors' accounts, the past and future profitability of ICC's trading program, the risk of the investment, and the size and experience of ICC's trading operation.
The SEC's complaint charges Cordo and Davis with violating Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act"), and seeks injunctive relief and civil money penalties against them. The complaint also charges Blount with violating Sections 5(a), 5(c) and 17(a) of the Securities Act and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is seeking injunctive relief, disgorgement of ill-gotten gains, and civil money penalties against Blount.
The SEC's suit against Cordo, Davis and Blount is the fourth enforcement action filed by the SEC since September 1998 involving South Florida companies and individuals offering foreign currency investments. In September 1999, the SEC obtained injunctive relief against Global Currency Management, Inc. ("Global") and its owner, Anthony Baldwin, based on allegations that they fraudulently raised over $1 million from investors. In September 1998, International Capital Management, Inc. ("ICM"), was enjoined in an action for emergency relief brought by the SEC. In that action, the SEC alleged that ICM had defrauded investors of more than $18 million. In October 1998, the SEC brought an emergency action against Unique Financial Concepts, Inc. in connection with a similar foreign currency trading scheme.
The SEC would like to acknowledge the valuable assistance of the Texas State Securities Board in this investigation.