 UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 17233 / November 15, 2001
Securities
and Exchange Commission v. Highland Financial
Corporation, et al. #4-99-CV-0719-D, USDC, NDTX
(Fort Worth Division)
The
U.S. Securities and Exchange Commission ("Commission")
announced today that Judge Sidney A. Fitzwater,
United States District Judge for the Northern
District of Texas, entered a Final Judgment of
Permanent Injunction and Other Equitable Relief
against Defendant John C. Matthews. The underlying
action was originally filed on September 2, 1999.
In it, Judge Fitzwater granted the Commission's
request for an emergency asset freeze, the appointment
of a Receiver, and other equitable relief to halt
a fraudulent "prime bank" investment
scheme. The Commission's Complaint charged that
from April 1998 through August 1998, Kay L. Cahill,
a convicted felon, Matthews and other defendants
violated 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, when they
raised approximately $9.5 million from investors
nationwide for a purported "trading program"
in foreign bank instruments promising returns
of as much as 1,000%. In reality, the trading
program did not exist and investor funds were
used to make "Ponzi" payments, in that
funds from later investors were used to pay purported
profits to earlier investors. In addition, investor
funds were misappropriated for certain defendants'
personal use. For example, Cahill purchased an
11,000-square-foot house in Tyler, Texas, at a
cost of approximately $1.2 million, and spent
investor funds for moving and travel expenses,
and to purchase furniture and automobiles.
As
part of the final judgment against Matthews, Judge
Fitzwater permanently enjoined Matthews from future
violations of the antifraud provisions of the
federal securities laws and ordered him to pay
disgorgement of $2,745,000, representing his gains
from the conduct alleged in the Commission's Complaint,
and prejudgment interest of $202,216. The Commission
waived payment of the disgorgement and prejudgment
interest, except for funds already provided to
the Receiver and the funds to be generated by
the Receiver's sale of Matthews' assets, including
his house and automobile, and did not seek the
imposition of a civil penalty, based upon Matthews
demonstrated financial inability to pay. According
to the Commission's Complaint, Matthews, age 48,
is a resident of El Paso, Texas. He participated
in the underlying fraud through his father's insurance
company, Sunland States Insurance Agency, by providing
bogus insurance policies purportedly guaranteeing
investments in Cahill's trading program. Matthews
received substantial funds from investors as insurance
premiums, but failed to obtain the promised policies.
from:
http://www.sec.gov/litigation/litreleases/lr17233.htm
UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 16496 \ March 31, 2000
Securities
and Exchange Commission v. Highland Financial
Corporation, et al. #4-99-CV-0719-D, USDC, NDTX
(Fort Worth Division)
The
U.S. Securities and Exchange Commission ("Commission")
announced today that on March 28, 2000, Judge
Sidney A. Fitzwater, United States District Judge
for the Northern District of Texas, entered a
Final Judgment of Permanent Injunction and Other
Equitable Relief against Defendant Robert H. Alberding.
Judge Fitzwater permanently enjoined Mr. Alberding
from future violations of the antifraud provisions
of the federal securities laws. Judge Fitzwater
further ordered Mr. Alberding to pay disgorgement
of $125,000, representing his gains from the conduct
alleged in the Commission's Complaint, and pay
prejudgment interest of $4,986.20. In addition,
Mr. Alberding is ordered to pay a $10,000 civil
money penalty.
On
September 2, 1999, Judge Fitzwater granted the
Commission's request for an emergency asset freeze,
the appointment of a Receiver, and other equitable
relief to halt a fraudulent "prime bank"
investment scheme. The Commission's Complaint
charges that from April 1998 through August 1998,
Kay L. Cahill, a convicted felon, and the other
defendants, raised approximately $9.5 million
from 10 investors nationwide for a purported "trading
program" in foreign bank instruments promising
returns of as much as 1,000%. In reality, the
trading program did not exist and investor funds
were used to make "Ponzi" payments,
in that funds from later investors were used to
pay purported profits to earlier investors. In
addition, investor funds were misappropriated
for certain defendants' personal use. For example,
Cahill purchased an 11,000-square-foot house in
Tyler, Texas, at a cost of approximately $1.2
million, and spent investor funds for moving and
travel expenses, and to purchase furniture and
automobiles.
According
to the Commission's Complaint, Mr. Alberding,
age 50 and a resident of Scottsdale, Arizona,
is a self-employed sales and marketing consultant
who conducted business under the name CanAmerican
Business Capital, Inc. Alberding's role in the
fraud was to solicit investors for the investment
program in exchange for commissions.
from:
http://www.sec.gov/litigation/litreleases/lr16496.htm
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