Post by Sapphire Capital on Jul 23, 2008 3:36:46 GMT 4
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20652 / July 22, 2008
SEC v. One Equity Corp., et al., Case No. C2-08-667 (S.D. Ohio)
SEC Obtains Emergency Relief Against Stock Based Loan Operators; Judge Orders Asset Freeze, Preliminary Injunction, and Appointment of Receiver
The Securities and Exchange Commission today announced that on July 17, U.S. District Judge Edmund A. Sargus, Jr. entered an order freezing assets, preserving records and property, and preliminarily enjoining defendants Michael S. Spillan and Melissa K. Spillan of Gahanna, Ohio, from violating the antifraud provision of the federal securities laws [Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder]. Judge Sargus also ordered the appointment of attorney Frederick L. Ransier as Receiver over defendants One Equity Corporation, Triangle Equities Group, Inc., Victory Management Group, Inc. and Dafcan Finance, Inc. (the One Equity Companies), which are located in Westerville, Ohio. The Commission sued the defendants on July 10 alleging they were operating a fraudulent stock loan program.
The Commission's complaint alleges that, since at least 2004, the Spillans and the One Equity Companies raised approximately $70 million from 125 borrowers by holding themselves out as stock based lenders, underwriters, or administrators. According to the complaint:
The defendants raised the money by inducing borrowers to transfer ownership of millions of shares of publicly traded stock to them as collateral for purported non-recourse loans.
The defendants promised to return the shares to borrowers who repaid their loans. In fact, the defendants generally sold all of the stock received from borrowers in order to fund each loan.
Unbeknownst to borrowers, after funding each loan, the Spillans did not set aside any cash reserves to repurchase and return shares to borrowers who repaid their loans. Instead, they used all of the money to pay expenses, including over $1 million in salaries and benefits to themselves.
Judge Sargus previously entered a temporary restraining order on July 10 prohibiting defendants from making any loans, making any disbursements from business accounts without prior Court approval, paying salaries to the Spillans, and destroying or discarding any relevant financial records.
Borrowers and other interested parties should direct all questions and inquiries to the Receiver to:
Frederick L. Ransier, III
Vorys, Sater, Seymour and Pease LLP
52 East Gay Street, P.O. Box 1008
Columbus, Ohio 43216-1008
Telephone: (614) 464-8226
Fax: (614) 719-5100
flransier@vorys.com
www.sec.gov/litigation/litreleases/2008/lr20643.htm
Litigation Release No. 20652 / July 22, 2008
SEC v. One Equity Corp., et al., Case No. C2-08-667 (S.D. Ohio)
SEC Obtains Emergency Relief Against Stock Based Loan Operators; Judge Orders Asset Freeze, Preliminary Injunction, and Appointment of Receiver
The Securities and Exchange Commission today announced that on July 17, U.S. District Judge Edmund A. Sargus, Jr. entered an order freezing assets, preserving records and property, and preliminarily enjoining defendants Michael S. Spillan and Melissa K. Spillan of Gahanna, Ohio, from violating the antifraud provision of the federal securities laws [Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder]. Judge Sargus also ordered the appointment of attorney Frederick L. Ransier as Receiver over defendants One Equity Corporation, Triangle Equities Group, Inc., Victory Management Group, Inc. and Dafcan Finance, Inc. (the One Equity Companies), which are located in Westerville, Ohio. The Commission sued the defendants on July 10 alleging they were operating a fraudulent stock loan program.
The Commission's complaint alleges that, since at least 2004, the Spillans and the One Equity Companies raised approximately $70 million from 125 borrowers by holding themselves out as stock based lenders, underwriters, or administrators. According to the complaint:
The defendants raised the money by inducing borrowers to transfer ownership of millions of shares of publicly traded stock to them as collateral for purported non-recourse loans.
The defendants promised to return the shares to borrowers who repaid their loans. In fact, the defendants generally sold all of the stock received from borrowers in order to fund each loan.
Unbeknownst to borrowers, after funding each loan, the Spillans did not set aside any cash reserves to repurchase and return shares to borrowers who repaid their loans. Instead, they used all of the money to pay expenses, including over $1 million in salaries and benefits to themselves.
Judge Sargus previously entered a temporary restraining order on July 10 prohibiting defendants from making any loans, making any disbursements from business accounts without prior Court approval, paying salaries to the Spillans, and destroying or discarding any relevant financial records.
Borrowers and other interested parties should direct all questions and inquiries to the Receiver to:
Frederick L. Ransier, III
Vorys, Sater, Seymour and Pease LLP
52 East Gay Street, P.O. Box 1008
Columbus, Ohio 43216-1008
Telephone: (614) 464-8226
Fax: (614) 719-5100
flransier@vorys.com
www.sec.gov/litigation/litreleases/2008/lr20643.htm