UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17654 / August 2, 2002
U.S. Securities and Exchange Commission v. James R. Harrold, Franklin Management and Consulting, LLC, Accipter, LLC, Franklin Asset Management and Consulting, LLC, Franklin Management and Consulting, Inc., and Concord Development Group, LLC., U.S. District Court for the Southern District of Indiana, Cause No. IP 01-1318-C T/K (S.D. Indiana 2001)
Criminal Complaint and Arrest Warrant for James R. Harrold are Unsealed
The U.S. Securities and Exchange Commission and the U.S. Attorney's Office for the Southern District of Indiana announced that on July 26, 2002, an order was issued, unsealing a criminal complaint and arrest warrant for James R. Harrold.
On September 7, 2001 the Commission filed a civil complaint alleging that James R. Harrold ("Harrold") and the Entity Defendants violated the registration and antifraud provisions of the federal securities laws by operating a prime-bank scheme. On the same day, the Honorable Judge David F. Hamilton of the United States District Court for the Southern District of Indiana entered a Temporary Restraining Order freezing three accounts controlled by Harrold. On September 10, 2001, Judge Hamilton entered a Temporary Restraining Order freezing all of Harrold and the Entity Defendants' assets. On September 14, 2001, Harrold and the Entity Defendants consented to the entry of an Order of Permanent Injunction, which continued the asset freeze and enjoined them from engaging in violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Order also requires Harrold and the Entity Defendants to disgorge their ill-gotten gains and pay civil penalties in an amount to be determined in a separate hearing by the Court. Harrold and the Entity Defendants consented to the entry of the permanent injunction, without admitting or denying the allegations of the complaint.
The U.S. Attorney's Office for the Southern District of Indiana originally filed a criminal complaint, under seal, on November 29, 2001, and alleged that Harrold committed offenses of mail fraud, wire fraud and money laundering in violation of Title 18, United States Code, Section 1341, 1343 and 1956(a)(1)A)(i). On the same day, Magistrate Judge Kennard P. Foster issued an arrest warrant that was also under seal.
The Commission wishes to acknowledge and thank the Internal Revenue Service, Criminal Investigation for the Southern District of Indiana and the Indiana Division of Securities for their assistance in this matter.