SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 15314 / April 3, 1997

SEC v. Robert Cord Beatty, et al., Civil Action No. 2:95CV 0886S (USDC UT).

     The Securities and Exchange Commission announced that on March 28, 1997, the Honorable Judge David Sam, U.S. District Court Judge, District of Utah, entered a Judgment of Permanent Injunction against Leslie John Gray.  Gray was enjoined from further violations of registration and antifraud provisions of the federal securities laws based on his offer and sale of nonexistent "risk free" prime bank instruments.  Gray consented to the entry of the Judgment of Permanent Injunction without admitting or denying the Commission's allegations.  The court waived disgorgement and determined not to impose civil penalties based on the demonstrated inability of the defendant to pay.

     The Commission's September 25, 1995, Complaint alleged that from February 1992 until February 1993, Gray and four other defendants, individually and through various entity names, offered and sold a fraudulent investment for which funds were raised from investors purportedly to buy and sell "prime bank" instruments such as documentary letters of credit, standby letters of credit, prime bank notes, or prime bank guarantees issued by the "top 100 world banks."  The Complaint also alleged that in connection with the offer and sale of these instruments, Gray and the other defendants falsely represented that the transactions were "risk free" and would earn a return of 10 percent to 25 percent monthly.  According to the Complaint, the defendants diverted most of the $2 million raised from investors to their own uses without informing the investors.