U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19559 / February 9, 2006
SEC v. Brad A. Weaver and Beta Asset Management, Inc., Civil Action No. 04 C 8279 (N.D. Ill., filed December 23, 2004)
PERMANENT INJUNCTION ENTERED AGAINST BRAD A. WEAVER AND BETA ASSET MANAGEMENT, INC.
The Securities and Exchange Commission announced that the Honorable Rebecca R. Pallmeyer, U.S. District Court Judge for the Northern District of Illinois, entered an Order on February 3, permanently enjoining Brad A. Weaver, a Chicago resident, and his company, Beta Asset Management, Inc., from violating Section 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, the antifraud provisions of the federal securities laws, in connection with a ponzi scheme.
The Commission filed its Complaint on December 23, 2004. The Commission's Complaint alleges that Weaver and Beta Asset Management, Inc., raised millions of dollars by fraudulently telling investors that they could profitably trade in the "error accounts" of a broker-dealer at no risk. The Defendants' so-called error account trading strategy did not and could not have existed. The Complaint further alleges that the Defendants induced investors to "roll-over" their alleged error account trading profits into a limited partnership. The Defendants fraudulently represented that the limited partnership had $30 million in assets at an offshore company, even though the limited partnership never had more than $30,000 in assets.
According to the Order, the amount of any disgorgement and civil penalty will be determined at a later time.