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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
DEFENDANTS SECURITIES ACT COMPLAINT ALLEGES INVESTORS EXCHANGE ACT GEORGIA NU-LIFE OFFERING MATERIALS STATE PRELIMINARY INJUNCTION MEMBERSHIPS PRIVATE RETIREMENT PLAN UNITED STATES EXCHANGE COMMISSION GENE ARTHUR CIVIL DISTRICT VIOLATING THEREUNDER ACCOUNT SCHEME INVESTMENT CONTRACTS OPERATING EXPENSES RETIREMENT PLAN RIVALING FORTUNE INTERSTATE/JOHNSON LANE REGISTERED BROKER-DEALER SEEKING ORDERS PERMANENT INJUNCTIONS |
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15099 / September 30, 1996
SEC v. Nu-Life International of Georgia, Inc. and Gene Arthur,
(N.D. Ga., Civil Action No. 96-2534)
The Securities and Exchange Commission ("Commission")
announced today that on September 27, 1996, the Honorable J.
Owen Forrester, United States District Judge for the Northern
District of Georgia, entered orders of preliminary injunction
("Orders") against Nu-Life International of Georgia, Inc. of
Dallas, Georgia and against its Chief Executive Officer, Gene
Arthur of Powder Springs, Georgia (collectively, "Defendants")
from violating Section 17(a) of the Securities Act of 1933
("Securities Act"), and Section 10(b) of the Exchange Act of 1934
("Exchange Act") and Rule 10b-5 thereunder. The Orders freeze
the Defendants' assets and order the Defendants to preserve
records and account for proceeds received from the fraudulent
scheme. The Defendants consented to the relief without admitting
or denying the allegations set forth in the complaint.
The Commission's complaint alleges that from April 1996 to
the present, Defendants, have raised at least $200,000 from
approximately 100 investors in at least twelve states by selling
securities in the form of investment contracts and approximately
$662,500 is stock options to 41 of those investors. The
complaint alleges the investment contracts involved are
memberships in a pyramid scheme, even though the business is
advertised as a legal multi-level marketing program. The
complaint alleges that Defendants have sold Nu-Life memberships
at prices ranging from $494 to $12,500 by misrepresenting or
failing to disclose material facts in connection with the offer
and sale of the securities.
For example, the complaint alleges that some of the offering
materials state that membership fees will be held in an escrow
account, when in fact Nu-Life is using the money to pay the
operating expenses of the company. The complaint further alleges
some of the offering materials state that investors will be
enrolled in a private retirement plan rivaling that of "Fortune
500 companies" established by Interstate/Johnson Lane, a
registered broker-dealer, when in fact no such plan was
established. The complaint also alleges that some offering
materials state that the investor will receive a guaranteed
return on his private retirement plan.
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