SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16982 \ May 1, 2001
SECURITIES AND EXCHANGE COMMISSION v. TERRY DON RADER
U.S.D.C /Northern District of Texas/Dallas Division Civil Action No. 3:01-CV-788
On April 24, 2001, the United States Securities and Exchange Commission ("SEC") filed a Complaint in U.S. District Court against Terry Don Rader (Rader), a registered representative and the former president of Weber Investment Corporation (WIC or firm), a registered broker-dealer, for engaging in a fraudulent scheme that caused $2.4 million in losses to WIC. According to the Complaint, Rader attempted to conceal his trading losses and his misappropriation of funds from WIC by overpricing securities in the firm's inventory accounts and concealing the ownership of certain securities. The SEC charged Rader with violations of the antifraud provisions of the securities laws, and with aiding and abetting the firm's violations of the books and records and net capital provisions of the federal securities laws. Rader, age 57, is currently serving a ten-year prison sentence at the Federal Medical Center for Prisoners at Fort Worth, Texas, in connection with his fraudulent activities at WIC.
The SEC's Complaint charges that Rader violated Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and for aiding and abetting WIC's violations of Sections 15(c)(3) and 17(a) of the Exchange Act and Rules 15c3-1, 17a-3, and 17a-4 thereunder. The SEC seeks a permanent injunction and a civil money penalty.
On April 26, 2001, the SEC instituted administrative and cease-and-desist proceedings against WIC and accepted its offer of settlement. Pursuant to the settlement, WIC has agreed, without admitting or denying the findings in the SEC's order, to be censured and to cease and desist from committing or causing future violations of the books and records and net capital provisions of the federal securities laws.
The SEC's order charges that WIC violated Sections 15(c)(3) and 17(a) of the Exchange Act and Rules 15c3-1, 17a-3 and 17a-4 thereunder.