U.S. SECURITIES & EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 17132 / September 18, 2001
U.S. Securities and Exchange Commission v. James R. Harrold, Franklin
Management and Consulting, LLC, Accipter, LLC, Franklin Asset
Management and Consulting, LLC, Franklin Management and Consulting,
Inc., and Concord Development Group, LLC., U.S. District Court for the
Southern District of Indiana, Cause No. IP 01-1318-C H/G (S.D. Indiana
2001)
The U.S. Securities and Exchange Commission ("Commission") announced
that on September 14, 2001, the Honorable Judge David F. Hamilton of
the United States District Court for the Southern District of Indiana
entered an Order of Permanent Injunction against James R. Harrold
("Harrold"), a resident of Indianapolis, Indiana and the Entity
Defendants. On Friday, September 7, 2001, the Commission filed a
Complaint alleging that Harrold and the Entity Defendants raised
approximately $2 million in a fraudulent prime bank scheme and sought
temporary and emergency relief. On the same day Judge Hamilton entered
a Temporary Restraining Order freezing three accounts controlled by
Harrold and set a hearing for Monday, September 10, 2001. On September
10, 2001, Judge Hamilton entered a Temporary Restraining Order
freezing all of Harrold and the Entity Defendants' assets and granted
other ancillary relief.
The Commission's Complaint alleged that the Federal Bureau of
Investigation warned Harrold in October 1999 that prime trading
programs do not exist. Despite that warning, however, since October
1999 through at least February 2001, Harrold and the Entity Defendants
raised at least $2 million by selling investments in the Rubix
Program, a purported "prime bank trading program." The Complaint
further alleged that Harrold and the Entity Defendants are currently
soliciting investors to invest in at least two other fraudulent
investment programs.
In the Rubix Program, Harrold and the Entity Defendants made false
claims that the money raised would be used to purchase prime bank
debentures issued by top world banks. Numerous government agencies,
including the Commission, the Federal Deposit Insurance Corporation
and the Board of Governors of the Federal Deposit Systems, however,
have warned the public that trading programs in prime bank instruments
do not exist and are fraudulent. The Complaint also alleged that
Harrold and the Entity Defendants misrepresented to investors in the
Rubix Program that their principal was never at risk and promised a
20% monthly rate of return. The Complaint further alleged that the
majority of funds raised in the Rubix Program were misappropriated and
SNIPPETS:
U.S. SECURITIES & EXCHANGE COMMISSION
U.S. Securities and Exchange Commission v. James R. Harrold, Franklin Management and
Management and Consulting, LLC, Franklin Management and Consulting, Inc., and Concord
The U.S. Securities and Exchange Commission announced that on September 14, 2001, the
On Friday, September 7, 2001, the Commission filed a Complaint alleging that Harrold and the
On the same day Judge Hamilton entered a Temporary Restraining Order freezing three accounts
On September 10, 2001, Judge Hamilton entered a Temporary Restraining Order freezing all of
The Complaint further alleged that Harrold and the Entity Defendants are currently soliciting
In the Rubix Program, Harrold and the Entity Defendants made false claims that the money
Numerous government agencies, including the Commission, the Federal Deposit Insurance
The Complaint also alleged that Harrold and the Entity Defendants misrepresented to investors
The Complaint further alleged that the majority of funds raised in the Rubix Program were
In addition, the Order freezes all of Harrold and the Entity Defendants' assets, requires the
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