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U.S. Securities and Exchange Commission

Litigation Release No. 18660 /April 7, 2004

ROGER A. HOUSEHOLDER, RESIDENT OF PARK RIDGE, ILLINOIS, INDICTED ON THREE COUNTS OF MAIL FRAUD FOR DEFRAUDING HIS ADVISORY CLIENTS

United States of America v. Roger A. Householder, (United States District Court for the Northern District of Illinois, Case No. 04-CR-282)

On March 10, 2004, the United States Attorney for the Northern District of Illinois filed criminal charges against former investment adviser Roger A. Householder, a resident of Park Ridge, Illinois. The indictment charged Householder with three counts of mail fraud (18 U.S.C. 1341 and 1346) for defrauding his investment advisory clients. According to the indictment, Householder devised and conducted a scheme to defraud his advisory clients by making false and fraudulent representations and material omissions to them concerning, among other things, his use of the funds they invested with him, the risks involved in the investments he proposed, and the expected return on these investments. According to the indictment, Householder then converted advisory client funds to his own benefit, resulting in losses to his clients of approximately $1.5 million.

In June 2002, the Commission filed a civil complaint against Householder and four related entities in connection with the conduct alleged in the indictment. In its complaint, filed in the U.S. District Court for the Northern District of Illinois, the Commission alleged that from 1991 through March of 2000, Householder acted as investment adviser for a number of his accounting clients. The complaint alleged that Householder recommended that his clients allow him to manage their investments, and that they purchase securities through him and his accounting firm, Householder Accounting Services, Inc. In making these recommendations, Householder made misrepresentations and omitted to state material facts to his clients concerning, among other things, the existence of the entities in which his clients were investing, his use of their fund, and the risks involved in these investments. The complaint further alleged that after getting his clients to invest, Householder misappropriated their investments. The complaint also alleged that Householder committed fraud through Apex Equity Advisors, Inc., a separate investment advisory firm run by Householder. Householder conducted risky trading on behalf of a mutual fund that violated restrictions on trading set forth in the fund's offering materials, resulting in the loss of all of the fund's assets. The Commission's complaint further alleged that Householder, Apex Capital Management Corporation, another investment advisory firm formed by Householder, and Apex Limited Partnership, sold Apex L.P. securities without disclosing material facts about Householder's disciplinary history. The Commission's complaint requested, among other relief, an order enjoining the defendants from further violations of the antifraud provisions of the federal securities laws, disgorgement of misappropriated funds, and appropriate civil penalties. In this civil action, the Honorable Blanche M. Manning, District Court Judge, entered orders freezing the assets of Householder, Apex Capital Management Corporation, and Apex Limited Partnership, and requiring these defendants to provide an accounting of investor funds. In addition, the Court entered a temporary restraining order and a preliminary injunction against Householder, enjoining him from further violations of the antifraud provisions of the federal securities laws. The Commission's action is currently pending.

For further information, see Litigation Release No. 17565 (June 14, 2002).

 

http://www.sec.gov/litigation/litreleases/lr18660.htm


Modified: 04/07/2004