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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
INVESTMENT ACT COMMISSION SECURITIES EXCHANGE COMMISSION VIOLATING THEREUNDER PRIME BANK SCHEME UNITED STATES RALPH WILLS PROFINANCIAL ADVISORS CIVIL COMPLAINT DISTRICT INVESTMENT ADVISER PURCHASE PRIME BANK NOTES PROFIT MISREPRESENTING RESOLD PROFINANCIAL OBTAINED FUNDS FAILING DISCLOSE MATERIAL FACTS CONNECTION SALE VIRTUALLY RISK-FREE UNREALISTIC PREDICTIONS EXORBITANT PROFITS |
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15152 / November 7, 1996
SEC v. W. Ralph Wills, III and ProFinancial Advisors, Inc.
(N.D. Ga., Civil Action No. 1:96-CV-2472)
The Securities and Exchange Commission announced today that
a complaint was filed by the Commission on September 23, 1996, in
the United States District Court for the Northern District of
Georgia against W. Ralph Wills, III ("Wills") and ProFinancial
Advisors, Inc. ("ProFinancial"), an Investment Adviser,
registered with the Commission. The complaint seeks to
permanently enjoin ProFinancial and Wills from violating Section
204 of the Investment Advisers Act of 1940 ("Adviser's Act") and
Rule 204-1 thereunder; Section 206(4)-2 of the Adviser's Act and
Rule 206(4)-2 thereunder; Section 10(b) of the Exchange Act of
1934 and Rule 10b-5 thereunder; and Section 17(a) of the
Securities Act of 1933. The Commission also seeks disgorgement
of all ill-gotten gains, prejudgment interest thereon, and civil
penalties.
The Adviser's Act violations primarily concern the operation
and management of two Investment Clubs by ProFinancial and Wills,
the president, sole shareholder and only employee of
ProFinancial. Additionally, Wills, through ProFinancial,
violated the antifraud provisions of the securities laws by
offering and selling investment contracts in early 1994 which
were part of a prime bank scheme. The scheme, as communicated by
Wills to the investors, involved the purchase of prime bank notes
with a face value of $200 million which would be purchased at a
discount and then resold for a profit. Wills and ProFinancial
obtained funds from investors by misrepresenting or failing to
disclose material facts in connection with the sale of prime bank
notes. Among other misrepresentations, Wills falsely represented
that the investments were virtually risk-free and made
unrealistic predictions to investors of the exorbitant profits to
be made from the scheme.
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