U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19540 / January 24, 2006
Securities and Exchange Commission v. Learn Waterhouse, Inc.; Randall Treadwell; Rick D. Sluder; Larry C. Saturday; and Arnulfo M. Acosta, Civil Action No. 04-CV-2037W (LSP) (S.D.Cal.)
Orders Issued Staying SEC's Action and Requiring Defendant Randall T. Treadwell to Show Cause Why His Pretrial Release Should Not Be Revoked
On November 17, 2005, the Honorable Thomas J. Whelan, United States District Judge for the Southern District of California, issued an order staying the Securities and Exchange Commission's civil action against defendants Randall T. Treadwell, Rick D. Sluder, Larry C. Saturday, and Arnulfo M. Acosta until the conclusion of the criminal action filed against them by the United States of America in the United States District Court for the Southern District of California (case number 05 CR 1570 W). Treadwell, Sluder, Saturday, and Acosta were indicted on September 8, 2005 by a federal grand jury in San Diego charging them with wire fraud and conspiracy.
The court's stay order provides that the receivership of Learn Waterhouse, Inc. shall continue and the receiver shall continue to perform all of his duties; however, the receiver cannot pay any investor claims until the stay is lifted by further order of the Court or expires by its own terms. The stay order further provides that all terms and subsequent modifications of the court's November 1, 2004 order of preliminary injunction remain in effect except those provisions which require the defendants to furnish information or records to the Commission or the receiver. The order provides that the defendants may still be held in contempt if they violate the unstayed provisions of the preliminary injunction.
The court previously ordered Treadwell to appear on December 5, 2005 and show cause why he should not be held in civil contempt for violating the court's preliminary orders freezing his assets. This was the third such order issued by the court against Treadwell. The hearing did not take place on December 5, 2005 because Treadwell had been arrested and taken into custody for allegedly violating the conditions of his pretrial release in the criminal action pursuant to an order issued by the court. The court is scheduled to hold a hearing on February 14, 2006 to decide whether to revoke Treadwell's pretrial release pending his trial in the criminal action.
On October 12, 2004, the Commission filed a complaint against Treadwell, Sluder, Saturday, Acosta, and Learn Waterhouse, alleging that they had raised millions from 1700 investors in a nationwide Ponzi scheme. On November 1, 2004, Thomas Lennon was appointed as the permanent receiver over Learn Waterhouse and given authority over all of its assets. The court also ordered the defendants to repatriate all assets from abroad, and issued a preliminary injunction prohibiting all of the defendants from future violations of the antifraud and registration provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. On February 23, 2005 and October 17, 2005, the court issued orders finding Treadwell in civil contempt. Treadwell is the former chairman, president and chief operating officer of Learn Waterhouse, a Texas corporation, which allegedly operated a fictitious prime bank trading program.
For further information, see Litigation Release Nos. 18932 (October 14, 2004), 18959 (November 4, 2004), 19059 (February 1, 2005), 19142 (March 17, 2005), 19384 (September 20, 2005), 19412 (October 4, 2005), and 19461 (November 9, 2005).