UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17500 / May 2, 2002
Securities and Exchange Commission v. 4NExchange, LLC, Paul R. Grant and Ronald K. Bassett; Civil Action No. 2:02CV-431K (USDC Utah)
The Commission has obtained an order temporarily restraining 4NExchange, LLC, Paul R. Grant and Ronald K. Bassett from making fraudulent sales of interests in a Ponzi scheme. The court also froze the assets of 4NExchange, Grant and Bassett. It is alleged, that since September 2001, the defendants, all of whom are located in Utah, have sold over $17 million in unregistered securities to approximately 140 investors throughout the United States. The complaint further alleges that investors have been told they can expect returns of 5% to 10% a month through the profits realized from currency trading operations. The complaint alleges, however, that only a nominal amount of the invested funds were ever reinvested in currency trading. Rather, the complaint alleges the promised returns have been paid from new sums invested in the program; thus, the 4NExchange program has been operated as a Ponzi scheme in which new investments have been used to pay interest and principal owed to earlier investors. It is also alleged that significant amounts of the invested funds have been used by Grant and Bassett for their personal use. The Order was entered May 2, 2002, by the Honorable Tena Campbell, United States District Judge for the District of Utah.
The complaint charged 4NExchange, Grant and Bassett with violating 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. A hearing on the Commission's motion for a preliminary injunction has been scheduled for May 13, 2002. The Commission wishes to thank the Utah Division of Securities and the Federal Bureau of Investigation for their assistance in this matter.