Michael B. Upton
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20299 / September 25, 2007
Securities and Exchange Commission v. Michael B. Upton, Civil Action No. 07-06180 CAS (AGRx) (C.D. Cal.)
SEC Charges Former Broker For Fraud in 27 Real Estate Related Securities Offerings
The Securities and Exchange Commission yesterday filed a settled civil injunctive action against Michael B. Upton, a former broker at Colorado-based MCL Financial Group, Inc., a brokerage firm, for fraudulently deceiving investors in 27 securities offerings.
To settle these charges, Upton has agreed to pay $287,496 in disgorgement, $8,090 in prejudgment interest, and a civil penalty of $120,000. Upton also agreed to be barred by the Commission from associating with any broker-dealer in a related administrative proceeding.
The Commission's complaint against Upton, which was filed in the United States District Court for the Central District of California, alleges that from August 2003 through March 2005 Upton sold securities in various offerings, including a real estate investment trust (also known as a REIT), and limited liability companies that invested in real estate.
The complaint further alleges that in selling the securities to investors, Upton
- Misrepresented that the REIT securities would be publicly traded and could increase in value by 30%, when Upton had been specifically told that it was uncertain if, or when, the security would become publicly traded.
- Misrepresented that an investment in the securities presented minimal risks when Upton knew that investments had substantial risks.
- Failed to disclose to investors that he received an undisclosed commission in connection with their investment, which amounted to $287,496 in undisclosed commissions.
As a result of the above, the complaint alleges that Upton violated the antifraud provisions of the securities laws. Without admitting or denying the allegations in the complaint, Upton consented to the entry of a final judgment, subject to the court's approval, permanently enjoining him from further 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.
