U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19220 / May 6, 2005
Securities and Exchange Commission v. Joseph A. Ferona Jr., et al., 05 CV-621 (WM) (D. Col. 2005)
On April 27, 2005, the Commission filed a motion in the United States District Court for the District of Colorado seeking an order to freeze all assets of Joseph A. Ferona Jr. ("Ferona"), Castle Rock Trading Company, and the Global Prosperity Fund. The Commission also filed a motion seeking an order requiring Ferona to show cause why he should not be held in civil contempt for his failure to comply with the Court's order to provide an accounting of investor funds as well as other required documents. In support, the Commission alleged that Ferona transferred investor funds into his personal account, selectively made payments to certain investors and failed to produce any documentation to the Commission as ordered by the Court.
On May 4, 2005, the Court granted the Commission's motion for an asset freeze and ordered that the freeze remain in effect until June 3, 2005. The Court also allowed Ferona fourteen additional days to produce documents.
The Commission's complaint, filed April 5, 2005, alleged, among other things, that Global Prosperity Fund was unlawfully operating as an unregistered investment company and that Ferona and Castle Rock Trading Company were unlawfully operating as unregistered investment advisers. The complaint also alleged that Ferona, Castle Rock Trading, and the Global Prosperity Fund did not comply with their statutory duty to allow a compliance examination. Ferona was preliminarily enjoined by consent on April 6, 2005. For further information, see Litigation Release No. 19167 (April 5, 2005) and Litigation Release No. 19192 (April 19, 2005).