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SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 15092 / September 30, 1996
SECURITIES AND EXCHANGE COMMISSION v. SEABOARD INVESTMENT
ADVISERS, INC., AND EUGENE W. HANSEN (United States District
Court for the Eastern District of Virginia, Norfolk Division,
Civil Action No. 2:96-CV-950)
On September 30, 1996, the Securities and Exchange
Commission ("Commission") filed a complaint in the U.S. District
Court for the Eastern District of Virginia against Seaboard
Investment Advisers, Inc. ("Seaboard"), and Eugene W. Hansen
("Hansen"), Seaboard's chief executive officer and controlling
shareholder. In the complaint, the Commission seeks a permanent
injunction and civil penalties against the defendants for
violations of the antifraud provisions of the Investment Advisers
Act of 1940 ("Advisers Act"). In addition, the Commission seeks
a court order to enforce compliance with an Order Making Findings
and Imposing Remedial Sanctions and Cease-and-Desist Order
entered by the Commission in August 1994. As part of this
relief, the Commission requests additional civil penalties
pursuant to Section 209(e)(4), the Special Provision Relating to
a Violation of a Cease-and-Desist Order.
According to the Commission's complaint, from January 1995
through July 1995, Seaboard, aided and abetted by Hansen, engaged
in a scheme to defraud Seaboard's investment advisory clients by
sending them false and misleading advertisements. These
advertisements, which were in the form of letters that reviewed
each client's investment portfolio, falsely represented that
Seaboard's accounts had outperformed various well-known market
indices, including the Lipper Analytical Services, Standard &
Poors 500 and Lehman Brothers Government/Corporate Bond indices.
At the time that this conduct occurred, both Seaboard and Hansen
were subject to a prior administrative order entered by the
Commission on August 3, 1994, less than six months prior to the
conduct at issue. In accordance with the terms of that order,
Seaboard and Hansen were required, among other things, to cease
and desist from committing or causing any future violations of
certain antifraud provisions of the Advisers Act. The complaint
alleges that, by engaging in the present conduct, Seaboard and
Hansen have violated the terms of the Commission's order as well
as other antifraud provisions of the Advisers Act.
The complaint further alleges that, in accomplishing the
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION v. SEABOARD INVESTMENT ADVISERS, INC., AND EUGENE W.
On September 30, 1996, the Securities and Exchange Commission filed a complaint in the U.S.
Investment Advisers, Inc., and Eugene W. Hansen, Seaboard's chief executive officer and
In the complaint, the Commission seeks a permanent injunction and civil penalties against the
the Commission seeks a court order to enforce compliance with an Order Making Findings and
As part of this relief, the Commission requests additional civil penalties pursuant to
According to the Commission's complaint, from January 1995 through July 1995, Seaboard, aided
These advertisements, which were in the form of letters that reviewed each client's
At the time that this conduct occurred, both Seaboard and Hansen were subject to a prior
In accordance with the terms of that order, Seaboard and Hansen were required, among other
The complaint alleges that, by engaging in the present conduct, Seaboard and Hansen have
The prior administrative order contained findings that Seaboard and Hansen had violated the
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