UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17120 / September 7, 2001
SECURITIES AND EXCHANGE COMMISSION V. RONALD K. RANDOLPH, INDIVIDUALLY, AND D/B/A INTERNATIONAL POLYMERS WORKS CIVIL ACTION NO. 1:01-CV-621, USDC, ED/TX [Beaumont Division]
On September 6, 2001, the Securities and Exchange Commission filed a civil action against Ronald K. Randolph, individually, and doing business as International Polymers Works ("IPW"), for an affinity fraud securities offering that exclusively targeted African-American Baptist investors, many of whom were elderly and disabled. The Complaint, filed in the United States District Court for the Eastern District of Texas, Beaumont Division, alleges that Randolph, a 48-year-old resident of Beaumont, Texas and a Baptist minister, sold securities in IPW promising returns between 7-30%. Randolph raised $3.5 million from 155 investors in several states from late 1997 through at least November 2000. In connection with these sales, Randolph made false and misleading statements to investors regarding IPW's business prospects, the security and returns associated with the investment, and the use of investor funds. For example:
These representations were not true. In fact, IPW had minimal business operations and Randolph simply used investor monies to make "Ponzi" payments to prior investors and to pay personal expenses. Moreover, there were no Lloyds guarantee, contracts with major corporations or export contracts with China and Taiwan.
The Complaint charges the defendant with violating the securities registration and antifraud provisions of Sections 5(a), 5 (c) 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 Commission seeks permanent injunctive relief against Randolph, as well as an accounting, disgorgement with prejudgment interest, and a civil money penalty.