Investment and Securities Misrepresention and Fraud Litigation and FINRA Arbitration Lawyer, Russell L. Forkey, Esq.

December, 2011:

United States Securities Exchange Commission v. Richard Dalton and Universal Consulting Resources LLC, Defendants, and Marie Dalton, Relief Defendant, Civil Action No. 10-CV-02794-REB-KLM (D. Colo.)


The Securities and Exchange Commission recently announced that on December 1, 2011, the United States District Court for the District of Colorado entered judgments against Richard Dalton and Universal Consulting Resources LLC (UCR) and ordered them to pay $15,842,948, which includes a civil penalty of $7,549,458. The Court found that Dalton routinely provided investors with false and materially misleading information about investments contracts known as the Trading Program and the Diamond Program. The Court stated that Dalton told investors they would receive annual profits ranging from 48% to 120% when, in fact, he was operating a Ponzi scheme, with new investors providing the funds for UCR’s profit payments to existing investors. The Court held that Dalton misappropriated investors’ funds and used at least $2.5 million for his personal benefit or for the benefit of family members.

According to the Commission’s complaint, Dalton raised approximately $17 million from 130 investors in 13 states. Dalton told investors in the Trading Program that their money would be held in an escrow account in a U.S. bank, and that a European trader would use the value of that account to obtain leveraged funds to purchase and sell bank notes. The Diamond Program supposedly generated profits from the trading of cut and uncut diamonds.

The Court permanently enjoined Dalton and UCR from violating Sections 5 and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and Dalton from violating Exchange Act Section 15(a).

The Court also entered a judgment on December 1, 2011 against Marie Dalton, who was named as a relief defendant in the Commission’s complaint. According to the Commission’s complaint, Marie Dalton purchased a residence in Golden, Colorado with over $900,000 in investors’ funds. The Court stated that a receiver would be appointed to sell the residence. The Court also ordered Marie Dalton to disgorge $115,000 in investors’ funds that were deposited in her bank account.

On October 19, 2011, a federal grand jury in the District of Colorado handed up an indictment charging Dalton and Marie Dalton with violations of federal criminal laws in connection with a scheme involving investments in UCR’s Trading Program and the Diamond Program.