Showing posts with label USE OF INVESTOR FUNDS. Show all posts
Showing posts with label USE OF INVESTOR FUNDS. Show all posts

Wednesday, July 16, 2014

ATTORNEY TO PAY ALMOST $4 MILLION FOR ORCHESTRATING PRIME BANK INVESTMENT SCHEME

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION 
Florida-Based Attorney Ordered to Pay Nearly $4 Million in Court Judgment of Prime Bank Investment Scheme Case

The Securities and Exchange Commission today announced that a federal judge has ordered a Miami-based attorney to pay nearly $4 million in a consent judgment of an SEC case against him for orchestrating a prime bank investment scheme. The money will be returned to harmed investors.

Bernard H. Butts Jr. was charged by the SEC in September 2013 for acting as an escrow agent for a supposed international trading program that raised approximately $3.5 million from investors. However, the program didn't really exist, and Butts instead doled out investor funds to enrich himself and others. The SEC obtained an emergency order in U.S. District Court for the Southern District of Florida to freeze the assets of Butts and his companies Bernard H. Butts Jr. PA and Butts Holding Corporation before investor proceeds could be fully dissipated.

The Honorable Jose E. Martinez issued an order dated July 10, 2014, requiring Butts and his companies to pay $1,691,608 in disgorgement and $96,232.99 in prejudgment interest as well as a penalty of $2,059,284.19. Butts and his wife Margaret A. Hering also must pay an additional $100,000 in disgorgement and $4,570.82 in prejudgment interest.

The SEC will return the money to investors through a Fair Fund. More than $1.9 million already has been deposited from accounts belonging to Butts and his companies into the registry of the court following the asset freeze instituted at the SEC's request last year. And the court's order requires the transfer to the court of more than $2 million separately seized by the U.S. Secret Service from accounts belonging to Butts and his companies. The SEC will then submit a plan to the court for distribution of these collected funds back to investors.

Butts has consented to be barred from the securities industry or offering penny stock, and agreed to be suspended from practicing as an attorney on behalf of any entity regulated by the SEC.

For additional information, please see Litigation Rel. No. 22792 (Sept. 9, 2013).

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