UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 15394 / June 25, 1997
SECURITIES AND EXCHANGE COMMISSION V. MARK E. GATCH AND HENRY
BENJAMIN
SCHMIDT, Case No. C-1-97-599 (SSB) (S.D. Ohio, W.D.)
The Securities and Exchange Commission announced the filing of a
complaint on June 24, 1997 in United States District Court for the
Southern
District of Ohio, Western Division, alleging a Ponzi scheme operated by
Ben
Mar Investments, Inc. ("Ben Mar"), a defunct unregistered investment
adviser based in Florence, Kentucky. Named as defendants were:
* Mark E. Gatch ("Gatch"), age 39, a resident of Amelia, Ohio
and
the co-founder, president, and chief financial officer of
Ben
Mar;
* Henry Benjamin Schmidt ("Schmidt"), age 63, a resident of
Crestview Hills, Kentucky, and St. Petersburg, Florida, and
the
co-founder and owner of Ben Mar.
The Commission's Complaint alleges as follows:
From February 1992 through March 1995, Gatch and Schmidt, through
Ben
Mar, raised approximately $19.5 million from at least 365 investors
by
selling unregistered promissory notes that promised interest based on
the
performance of an investment pool managed by Ben Mar (the "Ben Mar
Fund").
The investors were located in Kentucky, Ohio, Florida, and other
states.
In soliciting investors, Gatch and Schmidt told investors that they
could
expect to earn profits on their investment of 4% to 5% per month, based
on
past performance. Gatch also made false representations concerning
his
trading strategy and the risks of that strategy. Contrary to these
representations, Gatch's trading consistently resulted in substantial
losses. Gatch concealed these losses, and maintained the illusion of
SNIPPETS:
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION V. MARK E. GATCH AND HENRY BENJAMIN
SCHMIDT,
The Securities and Exchange Commission announced the filing of a complaint on June 24, 1997
District of Ohio, Western Division, alleging a Ponzi scheme operated by Ben
Mar Investments, Inc., a defunct unregistered investment adviser based in Florence, Kentucky.
* Henry Benjamin Schmidt, age 63, a resident of
co-founder and owner of Ben Mar.
raised approximately $19.5 million from at least 365 investors by selling unregistered
The investors were located in Kentucky, Ohio, Florida, and other states.
In soliciting investors, Gatch and Schmidt told investors that they could expect to earn
Gatch also made false representations concerning his trading strategy and the risks of that
Gatch concealed these losses, and maintained the illusion of trading profits, by using the
By the time the scheme came to light, investors had lost approximately $12.2 million,
Mar investors, illegally sold unregistered securities of Ben Mar, and failed to comply with
Schmidt, however, failed to investigate the performance claims and failed to take any steps
In addition to the fraud on investors in the Ben Mar Fund -- which was an unregistered
The Complaint charges both defendants with violating or aiding and abetting violations of
Act and Rule 206-2 thereunder, and seeks permanent injunctive relief, a civil penalty against
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