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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
COMPLAINT SECURITIES SAINT JAMES CLIENTS RELIEF DEFENDANT GEORGIA EXCHANGE COMMISSION CLAIN FAMILY CORPORATION ALLEGES CHARGES CLAIN INVESTMENT ADVISER ACT SAINT JAMES ASSET JAMES ASSET MANAGEMENT JOHN RAYMOND LINNEY CIVIL CONTROLLING DISTRICT GEORGIA COMPANY MONEY PURCHASE FUND CARS VIOLATIONS ILL-GOTTEN GAINS PERMANENT INJUNCTIONS DISGORGEMENT PREJUDGMENT CIVIL PENALTIES |
SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17363 / February 15, 2002
Securities and Exchange Commission v. Saint James Asset Management,
Inc. and John Raymond Linney Clain, Defendants and Clain Family
Corporation, Relief Defendant, Civil Action Number 1 02-CV-426 (N.D.
Ga.)
SEC CHARGES A GEORGIA INVESTMENT ADVISER AND ITS CONTROLLING
SHAREHOLDER WITH FRAUD.
The Securities and Exchange Commission announced today that it has
filed a complaint in the United States District Court for the Northern
District of Georgia against John Raymond Linney Clain and his
investment adviser firm, Saint James Asset Management, Inc., both of
Alpharetta, Georgia. The complaint alleges that between 1998 and 2000,
Clain and Saint James misappropriated approximately $920,000 from
sixteen clients. The complaint also names Clain Family Corporation, a
Georgia company, as a relief defendant.
The complaint alleges that Clain and Saint James obtained over
$960,000 from sixteen clients between January 1998 and October 2000 by
misrepresenting that the clients' money would be used to purchase
various securities. Without the clients' knowledge or permission,
Clain used the money primarily to fund the operations for an Augusta,
Georgia company in which Clain had an interest, Alternate Energy
Resources, Inc. The complaint also alleges that Clain used
misappropriated funds to purchase two cars and a diamond ring, and to
pay the mortgage on his house. Clain Family Corporation, which is
controlled by Clain, now owns one of the cars. It also alleges that
the defendants' misconduct included providing clients with materially
false and misleading periodic account statements that represented
falsely that they had bought specific securities for the clients, when
in fact they had.
The SEC's complaint charges Clain and Saint James with violations of
Section 17(a) of the Securities Act of 1933 and Section 10(b) of the
Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The
complaint also charges Clain and Saint James with violations of
Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The
SEC seeks permanent injunctions against Clain and Saint James as well
as an order compelling disgorgement of ill-gotten gains, along with
prejudgment interest and civil penalties. The complaint seeks return
of ill-gotten gains from Clain Family Corporation, the relief
defendant.
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