Securities and Exchange Commission v. Garfield Taylor, Inc., et al., Civil Action No. 1:11-CV-02054-RLW (District Court for the District of Columbia)
SEC OBTAINS JUDGMENTS AGAINST FORMER OFFICERS OF GIBRALTAR ASSET MANAGEMENT GROUP, LLC
Recently, the Securities and Exchange Commission announced that the Honorable Robert L. Wilkins, United States District Judge for the District of Columbia, entered final judgments on January 16, 2013, against three defendants to settle charges related to their collaboration in a multi-million dollar Washington-area Ponzi scheme operated through Gibraltar Asset Management Group, LLC and Garfield Taylor, Inc. (GTI):
Benjamin C. Dalley, of Washington D.C., formerly Vice President of Operations at Gibraltar, without admitting or denying the allegations in the SEC’s complaint, consented to the entry of a Final Judgment permanently enjoining him from aiding and abetting violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Final Judgment orders him to pay $72,500 in disgorgement and prejudgment interest and a civil penalty of $40,000.
Randolph M. Taylor, of Washington D.C., formerly Vice President for Organizational Development at Gibraltar, without admitting or denying the allegations in the SEC’s complaint, consented to the entry of a Final Judgment permanently enjoining him from aiding and abetting violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Final Judgment orders him to pay $584,148.32 in disgorgement and prejudgment interest, but waives payment of all but $30,000 of this amount, and does not impose a civil penalty, based upon his sworn Statement of Financial Condition. In connection with the settlements reached with Dalley and Randolph Taylor, Relief Defendant Reverb Enterprises, LLC consented to a judgment, which the Court entered on December 13, 2012, ordering it to pay $165,635 in disgorgement, representing profits gained as a result of the scheme.
William B. Mitchell, of Middle River, Md., formerly Vice President for Finance at GTI and an Executive Vice President of Strategic Planning at Gibraltar, without admitting or denying the allegations in the SEC’s complaint consented to the entry of a Final Judgment permanently enjoining him from violating Section 15(a)(1) of the Securities Exchange Act of 1934. The Final Judgment orders Mitchell to pay $164,131 in disgorgement and prejudgment interest, but waives payment of all but $15,000 of this amount, and does not impose a civil penalty, based upon his sworn Statement of Financial Condition.
Based upon the entry of the Court’s injunction against Mitchell, on January 30, 2013, the Commission instituted settled administrative proceedings against Mitchell. Without admitting or denying the Commission’s findings, except as to his admission of the entry of the Final Judgment by the Court, Mitchell consented to the entry of the Commission’s Order, which bars him from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization; and from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock.
The Commission filed a complaint on November 18, 2011, alleging that Gibraltar’s and GTI’s former Chief Executive Officer, Garfield M. Taylor, operating through GTI. and Gibraltar, with the assistance of Benjamin C. Dalley, Randolph M. Taylor, William B. Mitchell, Jeffrey A. King and Maurice G. Taylor, conducted a multi-million Ponzi scheme targeting investors in the Washington D.C. metropolitan area. According to the SEC’s complaint, the defendants defrauded more than $27 million from approximately 130 investors between 2005 and 2010.
The Commission’s case is still pending against the remaining defendants: Garfield M. Taylor, Jeffrey A. King, Maurice G. Taylor, GTI, Gibraltar, and The King Group, LLC. On December 13, 2012, the Court granted the Commission’s motion for summary judgment on all charges sought by the Commission against Garfield Taylor. The Court will determine the appropriate injunctive relief, as well as the specific amount of disgorgement and penalty that Garfield Taylor will be ordered to pay, when it enters its Final Judgment against him.
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