Securities and Exchange Commission v. Harral Dunbar, Jr., Individually and d/b/a Ghost International, Civil Action Number 02-233-B-M1 (M.D. La.)
The Securities and Exchange Commission ("Commission") announced today that on November 7, 2002 it filed a motion for an order to show cause, and on November 8, 2002, Judge Frank J. Polozola of the United States District Court for the Middle District of Louisiana issued an order directing defendant Harral Dunbar, Jr., to show cause why he should not be held in contempt of the Court's injunction for securities sales over the Internet which occurred after the entry of the permanent injunction. A hearing on the show cause order has been scheduled for December 18, 2002. In an earlier order, the Court permanently enjoined Dunbar from antifraud and registration violations of the federal securities laws and found that Dunbar, of Baton Rouge, Louisiana, owned the Ghost International Website and used it to solicit investors in investment contracts by promises of inordinate amounts of guaranteed returns and promises of no-risk investing, and further found that investors received little or no return despite several months of promises by Dunbar that returns would be paid. The Court previously ordered Dunbar to pay disgorgement in the amount of $9,600, along with prejudgment interest thereon, and ordered Dunbar to pay a "third tier" statutory civil penalty in the amount of $120,000.
The Commission's motion seeking the order to show cause alleged that Dunbar, after the entry of the injunction against him, obtained funds from at least one investor who purchased the securities by touting Ghost International's "private contribution and investment program" which allegedly paid, for example, $100,000 on a $200 investment over a few weeks. As with the earlier sales, Dunbar made various promises of exorbitant returns. Dunbar made various representations to fraudulently induce at least one investor, including that his company dealt in "high yield investments" and that funds were to be placed in offshore bank accounts, which would pay promised returns for five months of a supposed seven-month program.
The permanent injunction enjoined Dunbar from, violations 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.
See also: L. R. 17715 (September 6, 2002); L.R. 17477 (April 18, 2002); L.R. 17411 (March 14, 2002); L.R. 17400 (March 7, 2002)