Phoenix Outsourced Development, LLC, Edger Solutions Management, Michael McLaughlin, Derek McLaughlin, Louis Peter Goff, Eric Fairbourn, Brian Hubbard, Nicholas Deluca

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 25850 / September 25, 2023

Securities and Exchange Commission v. Phoenix Outsourced Development, LLC, Edger Solutions Management, LLC, Michael McLaughlin, Derek McLaughlin, Louis Peter Goff, Eric Fairbourn, Brian Hubbard, Nicholas Deluca, No. 2:23-civ-00663-DAO (U.S. District Court, District of Utah) filed September 25, 2023

SEC Charges Two Utah Fund Managers and Their Principals with Securities Fraud

The Securities and Exchange Commission today announced settled charges against two Utah fund managers, Phoenix Outsourced Development and Edger Solutions Management, and their principals, including a securities law recidivist, for allegedly orchestrating a fraudulent high-yield Forex trading program through two investment funds resulting in approximately $2.1 million in investor losses.

According to the SEC's complaint, Michael McLaughlin, a securities law recidivist, and Derek McLaughlin created an investment fund called POD Solutions, LLC, managed by their entity, Phoenix Outsourced Development. Louis Peter Goff, Brian Hubbard, Eric Fairbourn, and Nicholas Deluca created a separate, but similar investment fund, Edger Solutions, LLC, managed by their entity, Edger Management Solutions. The SEC alleges the two fund managers and their principals failed to disclose to investors that their investments would be combined into a Forex trading account that was operated by a convicted felon and a securities fraud recidivist. The SEC's complaint also alleges that the defendants made numerous material misrepresentations to investors concerning fees, profit and loss calculations, and the historical performance of the funds. The SEC further alleges that the defendants fabricated monthly account statements and that Michael and Derek McLaughlin misappropriated investor funds.

The SEC's complaint, filed in U.S. District Court for the District of Utah, charges all defendants with violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the allegations, each defendant consented to a permanent injunction from future violations of these antifraud provisions. Each individual defendant also consented to a conduct-based injunction prohibiting him from participating, directly or indirectly, including but not limited to, through any entity owned and controlled by him, in the issuance, purchase, offer, or sale of any security, provided, however, that such injunction shall not prevent him from purchasing or selling securities for his own personal account, and agreed to pay disgorgement with prejudgment interest and civil penalties in the following amounts:

• Michael Mclaughlin: disgorgement of $116,940 plus prejudgment interest of $11,503, and a civil penalty of $207,182.
   
• Derek McLaughlin: disgorgement of $108,433 plus prejudgment interest of $10,667, and a civil penalty of $75,000.
   
• Louis Peter Goff: a civil penalty of $60,000.
   
• Brian Hubbard, Eric Fairbourn, and Nicholas Deluca: civil penalties of $50,000 each.

The SEC's investigation was conducted by Jennifer Moore and Paul Feindt and was supervised by Tanya Beard and Tracy Combs of the Salt Lake Regional Office.

• SEC Complaint