South Florida Arbitration & Litigation Lawyer Blog
Securities and Exchange Commission v. Bernard H. Butts, Jr., Fotios Geivelis, Jr., also known as Frank Anastasio, Worldwide Funding III Limited LLC, Douglas J. Anisky, Sidney Banner, Express Commercial Capital LLC, James Baggs (Defendants), Bernard H. Butts, Jr. PA, Butts Holding Corporation, Margaret A. Hering, Global Worldwide Funding Ventures, Inc., and PW Consulting Group LLC (Relief Defendants), Civil Action No. 13-23115-CIV-MARTINEZ-MCALILEY (Southern District of Florida)
SEC Halts Florida-Based Prime Bank Investment Scheme
The Securities and Exchange Commission recently announced that it has obtained an emergency court order to halt a prime bank investment scheme by a Miami attorney and others who have promised investors exorbitant returns to be derived from a program based on the trading of bank instruments.
In a complaint unsealed September 6 in U.S. District Court for the Southern District of Florida, the SEC alleges that Bernard H. Butts, Jr.; Fotios Geievelis, Jr., a/k/a Frank Anastasio; Worldwide Funding III Limited LLC; Douglas J. Anisky; Sidney Banner, Express Commercial Capital LLC; and James Baggs raised over $3.5 million from approximately 45 investors in both the United States and abroad. Worldwide Funding, through Geivelis, told investors that they would receive returns of 6.6 million Euros (approximately $8.7 million U.S. dollars) on a $60,000-$90,000 investment within 15 to 45 days, and then approximately 14% returns per week for 40 to 42 weeks. Butts, who also solicited investors, acted as the escrow agent for the transaction. Both Geivelis and Butts assured investors that their funds would remain in escrow in Butts’ account until Worldwide Funding had acquired the bank instruments necessary to generate the promised returns. In reality, Butts transferred funds out of his trust account almost as soon as they were received, giving approximately 45% to Geivelis, 10% to sales agents, and retaining approximately 45% for himself. The SEC alleges that no funds were used to acquire bank instruments and that Geivelis used investor funds to travel and gamble. Anisky, Banner, Express Commercial Capital, and Baggs all sold interests in the fraudulent scheme.
The SEC’s complaint charges all defendants with 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 (“Exchange Act”), and Rule 10b-5 thereunder. The complaint also charges Butts, Geivelis, Anisky, Banner, Express Commercial Capital, and Baggs with violations of Section 15(a) of the Exchange Act. The SEC also named Bernard H. Butts, Jr. PA; Butts Holding Corporation; Margaret A. Hering; Global Worldwide Funding Ventures, Inc.; and PW Consulting Group, LLC as relief defendants. The SEC believes that these parties may have received ill-gotten assets from the fraud that should be returned to investors.
The court granted the SEC’s request for emergency relief including a temporary restraining order and asset freeze. The SEC further seeks permanent injunctions, disgorgement of ill-gotten gains, and financial penalties from each defendant.
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