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UNITED STATES SECURITIES
AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 14803 / January 30, 1996
SEC v. Ronald M. Zook, et al., Case No. 95-798-CIV-ORL-22 (M.D.
Fla.)
The
Securities and Exchange Commission announced that
on January 24, 1996, Honorable Anne C. Conway, United States
District Judge for the Middle District of Florida, entered
a final judgment of permanent
injunction upon default against
Ronald
M. Zook ("Zook") and Financial Concepts
Group International, Inc. ("FCGI") (collectively
"Defendants"),
enjoining
them from future violations of the registration
and antifraud provisions of the federal securities laws.
Previously,
on August 7, 1995, the Commission filed a
Complaint
against the Defendants, alleging violations of
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.
The
Complaint alleged that from at least late 1992
through
March
1995, Defendants defrauded at least 195 investors
residing
in at least 21 states of a total of approximately $6
million, by
soliciting
them to invest in investment contracts involving "prime bank" instruments, a/k/a "overseas"
or "European bank debentures" and a program involving trading on overseas
markets. The Complaint further alleged that Defendants defrauded investors
by making material misrepresentations
and omissions of material facts regarding the nature, safety and returns of investors'
purported investments.
Specifically,
the Complaint alleged that Defendants
misrepresented
to investors that their money was being used to invest in risk-free, prime bank instruments and bank debentures
paying
60% to 216% interest per year.
In at least four
instances, defendants misrepresented
to investors that their
funds
were being placed in "secured investments"
to trade on
various stock exchanges, including the European, Japanese
and Hong
Kong stock markets, paying 120% interest per year.
According
to the Complaint, Defendants neither invested
in prime bank instruments or bank debentures, nor engaged in trading
on any overseas or other exchange.
Instead, they allegedly used
investor funds to: (a) pay business and personal expenses;
(b) make
"interest" payments to other investors;
and (c) provide
interest-free loans - - some or all of which have never
been repaid
- - to various private corporations of which Zook
is an officer and/or shareholder; and (d) provide a "loan"
to a Nevada
corporation
with whom Zook claimed to have used to locate financing. In addition, the Complaint alleged that Defendants
provided
investors
with: (a) "full recourse agreements"
and other
documents which falsely represented that their principal
was guaranteed
up to $30 million; and (b) sham "Bank Debenture
Quarterly Report[s]" which referenced the principal
amount
invested
and the interest purportedly being earned on investors'
principal.
Zook,
approximately 32 years old, resides in Oviedo, Florida. FCGI
was located in Winter Park, Florida.
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