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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
SECURITIES TRUST ACT COMMISSION BROWN DEFENDANTS FUNDS EXCHANGE TRADING JUDGEMENT VIOLATIONS ARIZONA ALLEGES COMPLAINT INCOME TRUST SALE TREASURY SECURITIES TRADING PROFITS SOUTHWEST CIVIL ROBERT SCHEME REPRESENTATIONS PAID ENJOINS BROWN THEREUNDER SHOOP FLC CORPORATION DONN |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 25049
Litigation Release No. 15431 / August 5, 1997
SECURITIES AND EXCHANGE COMMISSION V. SOUTHWEST INCOME TRUST, ET AL.,
Civil
Action No. 97-0953 PHX RCB
The Securities and Exchange Commission ("Commission") announced that
on
July 23, 1997, the Honorable Robert C. Broomfield, United States
District
Judge, issued a Judgment against an Arizona businessman, Charles
Douglas
Brown ("Brown"), 58, for his role in a $10.7 million scheme involving
the
fraudulent sale of investments in a Treasury securities trading
program.
The Commission alleges in its Complaint that the defendants,
including
Brown, raised the $10.7 million from approximately 149 investors in
Arizona
and California through the sale of interests in investment trusts
("Trusts") and other programs. The defendants represented to
investors
that: investor funds would only be used to purchase and trade
Treasury
securities; investors would receive 1% per month in profits from
trading
Treasury securities; if the 1% monthly return from trading profits were
not
achieved, investors' funds would be returned; and only after payment of
the
1% monthly return, would the trustees of the Trusts, sales agents,
and
others be paid from excess trading profits.
The Complaint further alleges that contrary to these representations,
the
defendants operated a Ponzi-like scheme that paid investors their 1%
monthly return from other investors' funds, failed to return
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