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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
NORRIS COLEMAN INVESTMENT CLIENTS NEVADA DEFENDANTS CHARGES SECURITIES LLC FRAUD COMPLAINT EXCHANGE COMMISSION MAGELLAN COMMUNICATIONS GROUP NORTHERN LIGHTS TRADING PROGRAMS PRIME BANK VIOLATION JOSEPH LLOYD NORRIS MARK INVESTMENT ADVISERS DISTRICT INVESTMENT ADVISORY MONEY ACCOUNT LOSSES ACT DISGORGEMENT ILL-GOTTEN GAINS CIVIL PENALTIES |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 17403 / March 7, 2002
SECURITIES AND EXCHANGE COMMISSION v. JOSEPH LLOYD NORRIS, MARK GRAY
COLEMAN, MAGELLAN COMMUNICATIONS GROUP, LLC, and NORTHERN LIGHTS
FINANCIAL, LLC, No. CV-N-02-0112-DWH-VPC (D. Nev.)
SEC FILES FRAUD CASE AGAINST NEVADA INVESTMENT ADVISERS
On March 7, 2002, the Commission filed an action in the United States
District Court for the District of Nevada charging four Nevada
defendants with defrauding their investment advisory clients. The
defendants are Joseph Lloyd Norris and Mark Coleman of Carson City,
Nevada, and Magellan Communications Group, LLC, and Northern Lights
Financial, LLC, two Nevada companies through which Norris and Coleman
operated.
The Commission's complaint alleges that the defendants raised
approximately $8.5 million from more than thirty clients by promising
to invest the money in offshore "trading programs" that would generate
returns of four to seven percent per month, or the equivalent of 48 to
84 percent per year. According to the complaint, these "trading
programs" had the characteristics typical of fraudulent "prime bank"
schemes, which have been the subject of dozens of Commission
enforcement actions over the past decade. The Commission charges that
Norris and Coleman lost approximately $6 million of their clients'
funds in their attempts to invest in such "trading programs," then
sent their clients fictitious account statements concealing the
losses. The Commission also charges that Norris and Coleman continued
to encourage clients and prospective clients to deposit money with
them without disclosing the losses.
The Commission's complaint charges each of the defendants with
securities fraud in violation of Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also
charges Norris, Magellan and Northern Lights with investment advisory
fraud in violation of Section 206 of the Investment Advisers Act of
1940, and charges Coleman with aiding and abetting those violations.
The Commission is seeking an accounting, injunctions, disgorgement of
ill-gotten gains (with interest), and civil penalties against all
defendants.
For more information about prime bank fraud, visit the SEC's "Prime
Bank Information Center" at .
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