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U.S. Securities and Exchange Commission

Litigation Release No. 18220 / July 8, 2003

SEC v. Jerry A. Womack, Civil Action No. 01-1037 DOC (RCx) (C.D. Cal.).

The Securities and Exchange Commission ("Commission") announced today that, on June 30, 2003, the Honorable David O. Carter of the United States District Court for the Central District of California granted the Commission's motion for summary judgment and entered a Final Judgment Of Permanent Injunction And Other Relief Against Jerry A. Womack. Womack is permanently enjoined from violating the registration and antifraud provisions of the federal securities laws, specifically 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, and Sections 206(1) and (2) of the Investment Advisers Act. Under the terms of the Final Judgment, Womack is also required to pay disgorgement in the amount of $18,993,869.06, plus prejudgment interest, and a civil penalty in the amount of $110,000.

In November 2000, the Commission charged Womack with committing securities fraud in offering and selling $19 million in securities to about 400 investors nationwide between August 1997 and June 1999. Womack represented to investors that he would invest their money in the stock market pursuant to an investment strategy that he claimed to have developed and used successfully called the "Womack Dow Principle." He also represented to investors that, to implement the Womack Dow Principle, he had retained traders on the floor of the New York Stock Exchange. Additionally, Womack represented to investors that the trading activity was yielding profitable results.

In fact, Womack utilized only about a quarter of the investors' money for securities trading and suffered a net loss on that trading. Womack misused the majority of investor funds for personal and unrelated expenses and to pay some investors their purported profits and principal. Among other things, Womack used the funds to purchase homes, real property, artwork, jewelry and cars, and to pay for his honeymoon, cosmetic surgery for his wife, and his divorce settlement.

In May 2001, Womack was convicted of wire fraud and money laundering in a criminal proceeding brought by the United States Attorney's Office for the Central District of California, arising out of the same facts as the Commission's case. Also on June 30, 2003, the Honorable David O. Carter sentenced Womack to serve 188 months in prison and pay over $6 million in restitution.

 

http://www.sec.gov/litigation/litreleases/lr18220.htm


Modified: 07/08/2003