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U.S. Securities and Exchange Commission


Litigation Release No. 16782 / October 27, 2000


SEC Obtains Federal Court Injunction and Bars Former Broker

The Securities and Exchange Commission (the "Commission") announced today that on September 11, 2000, the Honorable Stanley S. Harris, United States District Judge for the District of Columbia, entered a Final Judgment of Permanent Injunction and Other Equitable Relief as to defendant David W. Benner ("Benner") in the above matter. Benner consented to the entry of the Final Judgment, without admitting or denying the allegations in the Complaint, except as to personal and subject matter jurisdiction, which he admitted.

The Commission's Complaint alleged, among other things, that Benner, along with sixteen other defendants, violated the registration and antifraud provisions of the federal securities laws by participating in a fraudulent scheme to offer and sell debt securities to the investing public for the purpose of raising capital to finance the purported medical accounts receivable factoring operations of an entity known as Current Financial Services, Inc. ("Current"). More specifically, as set forth in the Complaint, pursuant to the scheme to raise money for Current, Current sold its debt securities to various Sub-Issuers, which, in turn, in order to finance their purchases of Current debt securities, offered and sold their own securities to the investing public. During all times relevant, Benner acted as a sales agent for one of the Sub-Issuers, an entity known as American Equity Funding Corporation ("American Equity"). The Complaint alleges that Benner induced individuals to purchase American Equity debt securities by: (a) making false and misleading statements about, among other things, the rates of return investors would receive from investments in American Equity debt securities; (b) falsely representing that American Equity had filed a registration statement with the Commission; (c) falsely leading investors to believe that investments in American Equity debt securities were as safe and secure as investments in bank certificates of deposit, treasury notes and/or "blue chip" stocks; and (d) failing to disclose adverse facts concerning, among other things, Current's financial condition and business operations, which were material to determining the value of an investment in American Equity debt securities.

The Final Judgment restrains and enjoins Benner from committing future violations of Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Final Judgment, among other things, also orders Benner to disgorge $18,938.95.67, comprised of $9,613.17, representing the commissions he earned from his offer and sale of American Equity debt securities, plus $9,325.78, representing prejudgment interest thereon, but waives payment and declines to impose civil penalties based on Benner's demonstrated inability to pay.

The Commission also announced that on [date], it entered an administrative order related to Benner's conduct described in the Complaint. Benner consented, without admitting or denying the Commission's findings, to an Order barring Benner from association with any broker or dealer, with the right to reapply after one year. See In the Matter of David W. Benner, Securities Exchange Act Release No. 43486, October 27, 2000. .