U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission


Litigation Release No. 19076 / February 11, 2005

SEC v. MARION D. SHERRILL, Civil Action No. 1: 05-CV- 0386 (N.D.Ga.)

The Securities and Exchange Commission announced that the Honorable Beverly B. Martin, U.S. District Judge for the Northern District of Georgia, entered an Order on February 10, 2005, temporarily restraining Marion D. Sherrill ("Sherrill") from violating the antifraud provisions of the federal securities laws. The Order also freezes his assets.

The Commission's complaint, filed on February 9, 2005, alleges that, from approximately May 2003 through as recently as January 26, 2005, Marion D. Sherrill, a recidivist securities law violator, perpetrated a Ponzi scheme, selling over $400,000 of promissory notes to at least nineteen investors. While engaging in this Ponzi scheme, Sherrill was a registered representative of an Atlanta-based broker-dealer. The investors who purchased promissory notes were all brokerage customers of Sherrill and many were retired. Under the terms of these notes, Sherrill "borrowed" from his investors principal amounts ranging from $4,400 to $41,000, in exchange for a promise that he would pay monthly interest of 10% per annum and return to them the note's principal at the end of the note's term-a period of either twelve or twenty-four months. Sherrill told some of these investors that he would invest their money in his brokerage business in order to expand its operations. Sherrill told at least one customer that he would invest her money in a "tax-free mutual fund," from which she would get monthly tax-free income. Contrary to his representations, Sherrill did not use investor funds to expand his business operations or to purchase mutual funds. Instead, he deposited most, if not all, of the note proceeds in his personal bank account, commingled those proceeds with his own money, and paid his living expenses and various operating expenses of his business from the balance. Sherrill did not disclose to the investors that he paid their monthly interest by using money from new investors and that lacked the capacity to repay the principal without raising new investments.

The Commission's complaint seeks to permanently enjoin Sherrill from further violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission also seeks an accounting by Sherrill, disgorgement of all ill-gotten gains from the illegal conduct with prejudgment interest, and civil penalties.

SEC Complaint in this matter


Modified: 02/22/2005