U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18561 / January 30, 2004
Securities and Exchange Commission v. First Access Financial, LLC, et al., (U.S.D.C., Northern District of Texas, Dallas Division, Civil Action No. 3-04-CV-166-H)
SEC Files Suit to Halt Boiler Room FOREX Trading Scam
On January 28, 2004, the Securities and Exchange Commission obtained orders from the United States District Court in Dallas, Texas, to halt an investment scam and freeze assets for the benefit of investors. The Commission charged Thomas H. Keesee and Eduardo Lautieri, and two companies they control, with securities fraud in connection with an unregistered interstate offering and sale of securities in the form of interests in a pooled foreign currency trading account. The defendants consented to the entry of the orders. In addition, United States Senior District Judge Barefoot Sanders entered orders freezing assets of three defendants named solely for purposes of obtaining equitable relief ("relief defendants") and otherwise conserving assets and documents for the benefit of investors.
Named as defendants are:
The Commission also named in its Complaint as relief defendants, seeking return of investor funds unjustly received, the following entities and individuals:
The Commission's Complaint alleges that, using aggressive cold calling, an Internet website, television infomercials and paid radio spots, FAF claimed to provide investors access to foreign exchange markets at the special "Interbank level" supposedly accessible only to the "most profitable" and "largest financial institutions in the world." The Complaint also alleges that FAF further claimed to have a "Currency Management Team" with a five-year track record of 100% returns, headed by "a world-renowned institutional money manager" who is a "Top 10 certified and rated trader." The Commission contends that all of these claims, and others FAF made, are false and that FAF is in fact merely a five-month-old boiler room outfit whose real business is taking money from investors, paying commissions to its principals and funneling the balance to Paisley and his companies. The Commission alleges that, in fact, no investor funds went to "Interbank level" foreign currency trading. The Complaint alleges that the defendants raised at least $243,000 from investors in at least seven states and two foreign countries.
The Commission's Complaint charges FAF LLC, FA Inc., Keesee and Lautieri with violating 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 ("Exchange Act") and Rule 10b-5 thereunder. Keesee and FA Inc. are also charged with violating Section 15(a) of the Exchange Act by acting as unregistered brokers. The Complaint seeks against these defendants preliminary and permanent injunctions, accountings, disgorgement with prejudgment interest, civil money penalties and asset freezes. The Commission also seeks asset freezes, disgorgement and accountings from the relief defendants because they were unjustly enriched from the fraudulent offerings. A hearing on the Commission's motion for a preliminary injunction and other equitable relief is scheduled for February 24, 2004.