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UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
LITIGATION RELEASE NO.
15789 / June 24, 1998
SECURITIES AND EXCHANGE COMMISSION v. LENNOX INVESTMENT GROUP,
LTD., ACTIVE
INTERNATIONAL, INC., RANDALL W. LAW,
JAMES F. WARDELL, MONICA M. ILES,
FRANK L. PEITZ, AND DANIEL B. BENSON,
4:98CV536-Y, USDC, ND/TX
(Fort
Worth
Division)
On June 22, 1998, the
United States District Court for the Northern
District of
Texas granted the Commission s request for an order
freezing
the assets of Lennox Investment Group, Ltd. ( Lennox ), Active
International, Inc. ( Active ), Randall W. Randall W. Law (
Law ), James F.
Wardell ( Wardell ), Monica M. Iles
( Iles ), Frank L. Peitz ( Peitz ), and
Daniel B. Benson ( Benson
), and relief defendants P.B.F. Capital Corp,
Inc., Benson Financial, Inc.,
Robert Paladino, People s Residential
Mortgage Corp., Benny Griffis,
and L. E. Consultant Company. Additionally,
the
Court ordered all defendants to account for investor
monies and to
repatriate
any funds not subject to the jurisdiction of the
Court, and
ordered
the appointment of a receiver to take control
of the assets of the
defendants
for the benefit of investors.
According to the Commission s complaint,
Lennox, Active, Law,
Wardell, Iles, Peitz and Benson
raised approximately $11.1 million from
more than 50 investors in
at least 10 states through the fraudulent offer
and sale of unregistered
prime bank securities.
Investors were told that
their funds would be placed in an
escrow account, with the investment
principal guaranteed, and that their
funds would be invested in a trading
program where
investors could expect a yield of 122.5% per week for
40
weeks during the 54 week term of the program. In fact, according
to the
complaint,
the trading program did not exist and these defendants,
instead
of investing the funds, stole the
entire $11.1 million of investors
funds
which
were disbursed for the benefit of themselves and
their designees,
including
the relief defendants. The complaint further requests
an order
permanently
enjoining Lennox, Active, Law, Wardell, Iles,
Peitz and Benson,
an
order requiring disgorgement of all wrongfully
obtained profits, with
prejudgment
interest, and civil penalties against each defendant,
as well
as
disgorgement with prejudgment interest against
the relief defendants.
The Commission s request for a preliminary injunction enjoining
Lennox, Active, Law, Wardell, Iles, Peitz and Benson from future
violations
of 17(a) of the Securities Act of
1933 and Section 10(b) of the Securities
Exchange Act of 1934, and Rule 10b-5
thereunder, and Lennox, Law, Wardell
and Iles from future violations of
Section 5(a) and 5(c) of the Securities
Act will be heard on July 2, 1998.
COURT
GRANTS EMERGENCY ORDERS IN
PRIME
BANK SECURITIES SCHEME
On June 22, the
United States District Court for the Northern
District of
Texas granted the Commission s request for an order
freezing
the assets of Lennox Investment Group, Ltd. (Lennox),
Active
International,
Inc. (Active), Randall W. Randall W. Law, James
F.
Wardell,
Monica M. Iles, Frank L. Peitz, and Daniel B.
Benson, and
relief
defendants P.B.F. Capital Corp, Inc., Benson Financial,
Inc.,
Robert
Paladino, People s Residential Mortgage Corp.,
Benny Griffis,
and
L. E. Consultant Company. Additionally, the Court
ordered all
defendants
to account for investor monies and to repatriate
any funds
not
subject to the jurisdiction of the Court, and
ordered the
appointment
of a receiver to take control of the assets of
the
defendants
for the benefit of investors.
According to the Commission s complaint,
Lennox, Active, Law,
Wardell, Iles, Peitz and Benson
raised approximately $11.1 million
from more than 50 investors in at
least 10 states through the
fraudulent offer and sale of unregistered
prime
bank securities.
Investors were told that their funds
would be placed in an escrow
account, with the investment principal
guaranteed, and that their
funds would be invested in a trading
program where
investors
could
expect a yield of 122.5% per week for 40 weeks during the 54
week term
of the program. In fact, according to the complaint,
the trading
program did not exist and these defendants,
instead of investing the
funds, stole the entire $11.1 million
of investors
funds
which were
disbursed for the benefit of themselves and their designees,
including
the relief defendants. The complaint further requests orders
preliminarily
and permanently enjoining Lennox, Active, Law,
Wardell,
Iles,
Peitz and Benson from future violations of the
federal
securities
laws.[ SECURITIES AND EXCHANGE COMMISSION v. LENNOX
INVESTMENT
GROUP, LTD., et al., 4:98CV536-Y, USDC, ND/TX
] (LR-)
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