The Commission filed its complaint in this action on April 28, 2011. On June 20, 2011, the Commission filed a Second Amended Complaint. In its pleadings, the Commission alleged an ongoing, evolving, multi-million dollar fraudulent scheme perpetrated by the defendants. Between August 2011 and the end of 2012, the Court entered judgments against all of the defendants and several of the relief defendants in this action.

By order dated January 12, 2012, the Court established a receivership estate comprised of the assets and records of the defendants and relief defendants, and appointed Michael J. Uhl as Receiver (the “Receiver”). See the Court’s Order. On June 8, 2012, the Court entered an order adding additional entities to the receivership. See the Court’s Order. On July 6, 2012, this Court established a fair fund in accordance with Section 308(a) of the Sarbanes-Oxley Act of 2002, so that civil penalties could be distributed to harmed investors.

On December 8, 2014, the Receiver filed a motion to request a first interim distribution from the receivership estate pursuant to a “rising tide” distribution method (the “Receiver’s Distribution Plan”). See the Receiver’s Motion. On January 8, 2015, the Court entered an order approving the Receiver’s motion and authorized the Receiver to make an interim distribution. See the Court’s Order. Pursuant to the Receiver’s Distribution Plan, the Receiver distributed approximately $995,000 to ninety-four (94) investors.

By Order dated June 18, 2018, the Court terminated the receivership and ordered the Receiver to transfer all remaining assets to the Commission to hold pending further Court order. See the Court’s Order.

Over $1 million remains under the jurisdiction of the Court and the Commission has determined a second distribution feasible. In anticipation of proposing to the Court a plan of distribution, on March 5, 2019, the Commission filed a motion for an order (1) directing recovery of funds previously sent to the U.S. Treasury for inclusion in an interest-bearing account pending the Commission’s presentation of a plan of distribution to the Court for all funds under the Court’s jurisdiction in this case, which exceed $1.1 million (the “Fair Fund”); (2) appointing Miller Kaplan Arase LLP, as Tax Administrator of the Fair Fund; and (3) authorizing the payment of taxes and tax administration fees and expenses. See the Commission’s Motion and Memorandum in Support. On March 10, 2019, the Court entered an order granting the Commission’s motion. See the Court’s Order.

On August 7, 2019, the Commission filed a motion for an Order consolidating funds, directing future payments on judgments to the Commission, approving a distribution plan (the “Plan”), and appointing Catherine E. Pappas, a Commission employee, as the Distribution Agent of the Fair Fund. See the Commission’s Motion and Memorandum in Support with the Plan.

On December 27, 2019, the Court entered an order approving the Commission’s motion. In the Order, the Court directed the Clerk of the Court to send all funds held by the Court to the Commission for inclusion in the Fair Fund. Upon receipt of the funds from the Court, the Commission will make final calculations and direct the disbursement of Distribution Payments pursuant to the Plan. See the Court’s Order and the Plan.

In 2020, the Commission distributed approximately $1 million to eligible harmed investors.

In 2023, the Commission began a second distribution to eligible harmed investors. If your address information has changed since receipt of a payment in 2020, please contact the Office of Distributions.

For more information, please contact the Commission:

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov