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U.S. Securities and Exchange Commission


Litigation Release No. 19565 / February 15, 2006

Securities And Exchange Commission v. Credit First Fund, LP, et al., Civil Action No. CV-05-8741-DSF(PJWx) (C.D. Cal.)

Court Orders Preliminary Injunction, Continues Asset Freeze, and Appoints Permanent Receiver in a $10 Million Securities Fraud in Orange County, California

The Securities and Exchange Commission announced today that on February 13, 2006, the Honorable Dale S. Fischer of the United States District Court for the Central District of California issued a preliminary injunction order against David R. Lund, his companies, Investors First Financial Services, Inc. ("Investors First") and Investors Guild, Inc., and the three private offering funds Lund managed through his companies - Credit First Fund, LP, Credit First, LLC, and Credit First Income Plus, LLC (collectively, "Credit First") - in connection with a fraud action filed by the Commission on December 15, 2005. Lund, Investors First, Investors Guild, and Credit First all operated out of the same location in Anaheim Hills, California. The Court's preliminary injunction prohibits the defendants from violating Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 5(a) and 5(c) of the Securities Act. The Court also appointed Thomas F. Lennon, Inc. as permanent receiver over Investors First, Investors Guild, and Credit First. Additionally, the Court continued the relief it granted in its entry of a temporary restraining order and asset freeze on December 15, 2005. The Court's order, among other things: (i) freezes the defendants' assets; (ii) requires the defendants to provide a detailed accounting of their assets and transactions; and (iii) prohibits the defendants from destroying any documents in their possession, custody, or control.

The Commission's Complaint alleged that from April 2001 to December 2005, Lund and his companies raised $10.7 million mainly from elderly and retired investors through sales of ownership interests in Credit First. The defendants represented that investor funds would be used to purchase distressed debt, which Credit First would collect or resell at a profit. The defendants also represented that Credit First would pay investors a monthly return of one to three percent on their investment from Credit First' operations. The Complaint alleges that in reality, Credit First was not profitable, and the defendants were making monthly returns of capital to the investors. The Complaint also alleges that Credit First engaged in an unlawful unregistered securities offering by selling Credit First's securities nationwide through general solicitation.

For more information see [SEC v. Credit First Fund, LP, Credit First, LLC, Credit First Income Plus, LLC, Investors First Financial Services, Inc., Investors Guild, Inc., and David R. Lund, Case No. CV05-8741-DSF(PJWx) (C.D. Cal.)] (LR-19497, December 16, 2005)



Modified: 02/15/2006