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Securities and Exchange Commission v. K2 Unlimited, Inc., 211 Ventures, LLC, Diane Glatfelter, Robert Rice, and Robert Anderson, Civil Action No. 1:11-cv-11649
SEC Obtains Final Judgment Against Defendant in Fictitious Investment Scheme
The Securities and Exchange Commission recently announced that on April 4, 2014, a Massachusetts federal court entered a final judgment by consent against defendant Robert C. Rice, of Tallahassee, Florida, in a securities fraud case filed by the Commission in 2011. The final judgment, entered by the Honorable Mark L. Wolf, imposes on Rice a permanent injunction against future violations of antifraud and other provisions of the federal securities laws and orders him to pay disgorgement, prejudgment interest and a civil penalty totaling $525,896.51.
In its Complaint, filed September 19, 2011, the Commission alleged that beginning in 2007, Rice, with other defendants, purported to offer direct investments in fraudulent trading programs involving “bank guarantees,” promising sky-high returns with guarantees against loss. In fact, the Commission alleges that the bank guarantees were fictional and the trading programs non-existent, and that Rice and other defendants together defrauded investors of more than $1.8 million. The final judgment permanently enjoins Rice from violating Section 17(a) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; Sections 5(a) and 5(c) of the Securities Act; and Section 15(a) of the Exchange Act. The final judgment also ordered that Rice is liable for disgorgement in the amount of $310,500, representing profits gained as a result of the conduct alleged in the Complaint, with prejudgment interest of $85,396.51, and imposed a civil penalty in the amount of $130,000. Rice consented to the entry of the final judgment without admitting or denying the allegations in the Commission’s Complaint.
On March 13, 2013, the court entered final judgments by default against defendants 211 Ventures, LLC, and Robert S. Anderson, imposing judgments totaling more than $2.3 million in disgorgement, prejudgment interest and civil penalties, and permanently enjoining both defendants from future violations of the antifraud and other provisions of the federal securities laws. The Commission’s case against defendants Diane Glatfelter and K2 Unlimited, Inc. continues.
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