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UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
Litigation Release No. 15152 / November 7, 1996
SEC v. W. Ralph Wills, III and ProFinancial Advisors, Inc.
(N.D. Ga., Civil Action No. 1:96-CV-2472)
The
Securities and Exchange Commission announced today
that a complaint was filed by the Commission on
September 23, 1996, in the United States District
Court for the Northern District of Georgia against
W. Ralph Wills, III ("Wills") and ProFinancial
Advisors, Inc. ("ProFinancial"), an
Investment Adviser, registered with the Commission.
The complaint seeks to permanently enjoin
ProFinancial and Wills from violating Section
204 of the Investment Advisers Act of 1940 ("Adviser's
Act") and Rule 204-1 thereunder; Section
206(4)-2 of the Adviser's Act and Rule 206(4)-2
thereunder; Section 10(b) of the Exchange Act
of 1934 and Rule 10b-5 thereunder; and Section
17(a) of the Securities Act of 1933.
The Commission also seeks disgorgement
of all ill-gotten gains, prejudgment interest
thereon, and civil penalties.
The
Adviser's Act violations primarily concern the
operation and management of two Investment Clubs
by ProFinancial and Wills, the president, sole
shareholder and only employee of ProFinancial.
Additionally, Wills, through ProFinancial,
violated the antifraud provisions of the securities
laws by offering and selling investment contracts
in early 1994 which were part of a prime bank
scheme.
The scheme, as communicated by Wills to
the investors, involved the purchase of prime
bank notes with a face value of $200 million which
would be purchased at a discount and then resold
for a profit. Wills and ProFinancial obtained funds from investors by misrepresenting
or failing to disclose material facts in connection
with the sale of prime bank notes.
Among other misrepresentations, Wills falsely
represented that the investments were virtually
risk-free and made unrealistic predictions to
investors of the exorbitant profits to be made
from the scheme.
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