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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
INVESTORS SECURITIES EXCHANGE COMMISSION COMPLAINT GEORGIA CIVIL ACTION TERRANCE MICHAEL COMPLAINT ALLEGES PARTNERSHIPS UNITED STATES NORTHERN DISTRICT ACT SETTLED CIVIL ACTION FRAUD ADMITTING DENYING ALLEGATIONS ENTRY JUDGEMENT PERMANENTLY ENJOINS VIOLATING THEREUNDER INVESTMENT ADVISERS ACT DISGORGEMENT CIVIL PENALTIES CRIMINAL SANCTIONS SECURITIES DIVISION ASSISTANCE MATTER |
SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17572 / June 17, 2002
Securities and Exchange Commission v. Terrance Michael O'Donohue and
O'Donohue Fund Management, Inc., Civil Action No. 1 02 CV 1663 (N.D.
Ga.)
THE SEC FILES SETTLED CIVIL ACTION AGAINST TERRANCE MICHAEL O'DONOHUE
AND O'DONOHUE FUND MANAGEMENT, INC.
The Securities and Exchange Commission ("Commission") announced today
that it has filed a settled civil action against Terrance Michael
O'Donohue and O'Donohue Fund Management, Inc. The Commission's
complaint alleges that, from June 1995 until November 2000, O'Donohue
raised almost $3 million for three limited partnerships from 53
investors. The complaint alleges that O'Donohue, who was a Georgia
resident, or O'Donohue Fund Management, a Georgia corporation
controlled by O'Donohue, were the general partners and made the
investment decisions for the partnerships. According to the
Commission's complaint, O'Donohue diverted over $2 million of investor
funds, falsely stated to investors that their funds were invested,
sent out false account statements indicating that investors' funds
were earning returns, and otherwise engaged in a variety of conduct
which operated as a fraud and deceit on investors. The complaint also
alleges that O'Donohue and O'Donohue Fund Management sold unregistered
securities.
O'Donohue was convicted of three counts of mail fraud involving this
same conduct. He was sentenced in the United States District Court for
the Northern District of Georgia to serve 48 months in prison,
followed by three years of supervised release, and was ordered to pay
restitution of $2,468,912.41.
O'Donohue and O'Donohue Fund Management consented, without admitting
or denying the allegations in the complaint, to the entry of a final
judgment that permanently enjoins them from violating Sections 5(a),
5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the
Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and
Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The
Commission did not seek disgorgement or civil penalties because of the
criminal sanctions already imposed.
The Commission wishes to thank the United States Attorney's Office for
the Northern District of Georgia and the Georgia Secretary of State,
Securities Division, for their assistance in this matter.
_________________________________________________________________
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