SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16564 / May 24, 2000
SECURITIES AND EXCHANGE COMMISSION V. HURST CAPITAL CORP., ET AL.,
The Securities and Exchange Commission ("SEC") announced that on December 16, 1999, the United States District Court for the Southern District of Florida entered an Order Setting and Partially Waiving Disgorgement against Relief Defendant Joseph C. Hurst ("Joseph Hurst"). Joseph Hurst was ordered to disgorge $2,198,793, representing funds he received from his brother Defendant James F. Hurst ("James Hurst") and/or Defendant Hurst Capital Corp. ("Hurst Capital"), plus prejudgment interest of $53,394. In partial satisfaction of the disgorgement order, Joseph Hurst was ordered to turn over approximately $814,302 in cash and real property to the court-appointed receiver in this matter. Based on Joseph Hurst's demonstrated inability to pay, payment of the remaining disgorgement and prejudgment interest thereon was waived.
In a complaint filed in February 1998, the SEC alleged that Defendants James Hurst and Hurst Capital, among others, violated the registration and anti-fraud provisions of the federal securities laws by defrauding hundreds of investors nationwide of $49 million through the offer and sale of unregistered securities in the form of interests in accounts receivables. The SEC sought a temporary restraining order, an order freezing assets, an accounting, an order prohibiting the destruction of records, an order expediting discovery, and the appointment of a receiver, all of which were granted by the Court. In late February 1998, the Court entered a preliminary injunction against the Defendants, which kept in force the relief granted by the temporary restraining order.
In June 1998, the Court granted the SEC's motion to add Joseph Hurst as a Relief Defendant and to extend the asset freeze to him. The SEC alleged that Joseph Hurst received millions of dollars in fraudulently-obtained investor funds from his brother, Defendant James Hurst and/or Defendant Hurst Capital. Without admitting or denying any of the allegations in the SEC's Amended Complaint, Joseph Hurst consented to the entry of the Order Setting and Partially Waiving Disgorgement against him.
In April 2000, Defendant James Hurst pleaded guilty to one count of securities fraud in a criminal information filed by the United States Attorney for the Southern District of Florida.http://www.sec.gov/litigation/litreleases/lr16564.htm