U.S. SECURITIES & EXCHANGE COMMISSION
Litigation Release No. 17950 / January 24, 2003
SEC v. Robert L. Bentley, Entrust Group and Bentley Financial Services, Inc., Civ. Action No. 53-66 (Eastern District of Pennsylvania)
On December 27, 2002, United States District Court Judge Jay C. Waldman entered an order permanently enjoining and restraining Robert L. Bentley from violating Section 17(a) of the Securities Act of 1933; and Sections 15(a) and 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. Bentley consented to the entry of the injunction without admitting or denying the allegations of the Commission's complaint.
The Commission's complaint alleged that the defendants, including Bentley, claimed to be selling bank-issued, federally insured certificates of deposit ("CDs"), but that the defendants were in fact selling uninsured securities. Although the defendants were using at least some investor funds to buy CDs, the terms of the CDs often varied substantially from those of the securities defendants were selling. The Commission also alleged that, in many cases, investors had to rely on the defendants' ability to attract new investors in order for previous investors to receive repayment of their principal. Accordingly, investors were not buying the low-risk, federally-insured CDs that they were promised. Rather, they were buying higher risk securities issued by defendants, whose business was uninsured, unaudited and unregulated.