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U.S. Securities and Exchange Commission

Securities and Exchange Commission
Washington, D.C.

Litigation Release No. 17738 / September 20, 2002

Securities and Exchange Commission v. Alfred M. Lemcke, et al., Civil Action No. 01-547 (RRL) (D.R.I. November 16, 2001).

Relief Defendant in Commission Case Ordered to Pay Proceeds From House Sale into Registry of Court

The Commission announced that, on September 4, 2002, a Rhode Island federal judge issued an order requiring Rosemary Grogan-Lemcke (Grogan-Lemcke) to pay into the registry of court the proceeds from the sale of a house she owned with her husband, Alfred M. Lemcke (Lemcke). Lemcke is a defendant in a civil fraud case the Commission filed in November 2001 alleging that Lemcke, an unregistered investment adviser, defrauded his clients of approximately $1 million.

The court entered a temporary restraining order and asset freeze against Lemcke on November 16, 2001, and subsequently entered a preliminary injunction against Lemcke and continued the asset freeze on December 6. On April 15, 2002, the Court entered an order modifying the asset freeze to allow the sale of the Lemcke home, which was jointly owned by Lemcke and Grogan-Lemcke, on the condition that the proceeds from the sale be deposited with the registry of court.

According to a motion filed by the Commission on August 20, 2002, although the house was sold on June 14, 2002, Grogan-Lemcke has refused to comply with the court's order and the sale proceeds - totalling $245,560 - are being held by her attorney. The Commission named Grogan-Lemcke as a relief defendant in the civil action and also sought a ruling from the court holding Grogan-Lemcke in contempt unless she deposits the proceeds with the court.

The court's September 4 order requires Grogan-Lemcke to deposit the proceeds from the sale with the registry of court. According to the order, if Grogan-Lemcke fails to comply with this requirement, the court will issue a show cause order to hold her in contempt. The Commission's action against Lemcke is still pending.

For further information, see Litigation Releases 17237 (November 16, 2001) and 17515 (May 14, 2002).


Modified: 09/23/2002