UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17011 , May 21, 2001
SECURITIES AND EXCHANGE COMMISSION V. LINDSEY PAUL VINSON and FAIRMOUNT DEVELOPMENT, L.C., Civ. Action No. 3-01CV0934-X (USDC/N.D.Tex.)
On May 17, 2001, the Securities and Exchange Commission sued Lindsey Paul Vinson ("Vinson") and Fairmount Development, L.C. ("Fairmount") in the U.S. District Court for the Northern District of Texas, Dallas Division, alleging that Vinson, the control person for Fairmount and another entity, engaged in the fraudulent sale of $3.7 million of notes. The Complaint further alleges that Vinson misappropriated more than $1 million of the proceeds.
The defendants named in the Commission's Complaint are:
Lindsey Paul Vinson ("Vinson"), age 41, of Southlake, Texas, is an attorney licensed in Texas. During the relevant time period, Vinson served as the general partner of Hampstead Properties, Ltd. ("Hampstead"), a Dallas-based, Texas limited partnership currently in bankruptcy liquidation, and the managing member of Fairmount.
Fairmount Development, L.C. is a Texas limited liability company with its principal office in Dallas, Texas, formed in 1996 to purchase and develop real estate. Vinson is Fairmount's managing member and owns ten percent of the company. Fairmount raised $1.3 million, in 1996 and 1997, from the sale of promissory notes.
The Complaint states that from August 1995 until June 1997, Hampstead and Fairmount raised funds through the sale of promissory notes. Hampstead and Fairmount investors were told that their funds would be used to purchase commercial real estate, and that no more than 11% would be used for fees and expenses. Instead, Vinson spent more than $1 million for his own personal benefit, including for unrelated business ventures and personal credit card bills.
The SEC's Complaint charges Vinson and Fairmount with violations of Section 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 Commission seeks permanent injunctions, disgorgement and civil penalties against each of the defendants.
The Commission today also instituted public administrative and cease-and-desist proceedings against three registered representatives, alleging that they engaged in, or aided and abetted, securities law violations in connection with sales of the Hampstead and Fairmount notes and other investments. See In the Matter of Larry W. Tyler, Admin. Proc. File No. 3-10487; In the Matter of Dennis E. Ward, Admin. Proc. File No. 3-10485; In the Matter of Carolyn Birch Noonan, Admin. Proc. File No. 3-10486.