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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17668 / August 9, 2002

Federal Judge Permanently Enjoins Chimneyville Investments Group, Inc. and Joseph Randolph Belew

Securities and Exchange Commission v. Chimneyville Investments Group, Inc. and Joseph Randolph Belew, United States District Court for the Southern District of Mississippi, Jackson Division, Civil Action File No. 3:98-CV-574 WS

The Securities and Exchange Commission ("SEC") announced today that the Honorable Henry T. Wingate, United States District Judge for the Southern District of Mississippi, Jackson Division, entered a Final Judgment of Permanent Injunction as to Defendants Chimneyville Investments Group, Inc. ("Chimneyville") and Joseph Randolph Belew ("Belew"). Chimneyville and Belew were enjoined from further violations of Sections 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. Chimneyville was also enjoined from further violations of Sections 15(c) and 17(a) of the Exchange Act and Rules 15c3-1, 15c3-3, 17a-3 and 17a-4 thereunder. Belew was also enjoined from further violations of Sections 15(c)(3) and 17(a)(1) of the Exchange Act and Rules 15c3-1, 15c3-3, 17a-3 and 17a-4 thereunder.

The Court ordered disgorgement and prejudgment interest against Belew in the amounts of $454,833 and $121,519.51, respectively, but waived payment due to Belew's demonstrated inability to pay, and did not impose a civil penalty. Chimneyville and Belew consented to the entries of the judgments without admitting or denying any of the allegations of the Commission's Complaint.

The Commission's Complaint alleged that Belew fraudulently converted at least $220,000, and probably more than $650,000, of investors' funds to his own uses, in violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Complaint also alleged, among other things, that Chimneyville, as an introducing broker-dealer, failed to maintain $5,000 in net capital as required by Rule 15c3-1. In addition, the Complaint alleged that Chimneyville failed to make and keep current books and records, including, among others, net capital computations and a general ledger as required by Rules 17a-3 and 17a-4, and failed to comply with the customer protection rules set forth in Rule 15c3-3.

On September 1, 1998, with the consent of the parties, an Order of Preliminary Injunction was entered against Chimneyville and Belew which enjoined them from future violations of the foregoing sections and rules and freezing the assets of the parties.

See also: L.R. 15867 (September 2, 1998)


http://www.sec.gov/litigation/litreleases/lr17668.htm

Modified: 08/09/2002