Marvel Partners, marvelpartners.us, marvelpartners.net, and John Does, Nos. 1-5
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21254 / October 16, 2009
SEC v. Marvel Partners, marvelpartners.us, marvelpartners.net, and John Does, Nos. 1-5, (United States District Court for the District of Massachusetts, Civil Action No. 1:08-cv-12008).
SEC OBTAINS JUDGMENTS AGAINST OPERATORS OF FRAUDULENT WEBSITES IMPERSONATING INVESTMENT ADVISER
On October 15, 2009, the U.S. District Court for the District of Massachusetts entered a Final Judgment by default against Marvel Partners and two websites it operated, marvelpartners.us and marvelpartners.net (collectively, "Marvel Partners"). The Commission had previously filed an enforcement action against the parties on December 4, 2008 concerning an apparent ongoing investment fraud by Marvel Partners, alleging that it had falsely promised guaranteed investment returns of up to 138% over a three day period and falsely claimed partnership with an actual registered investment adviser based in Boston. The Final Judgment enjoined Marvel Partners from further securities law violations, ordered the three Marvel Partners entities to pay, on a joint-and-several basis, $44,139.08 in disgorgement and prejudgment interest, and ordered each of the three Marvel Partners entities to pay a civil penalty of $100,000.
The Commission's Complaint alleged that Marvel Partners, along with unidentified individuals operating the websites referred to as John Does 1-5, conducted a fraudulent offering of unregistered securities via the Internet. The Complaint also alleged that, in soliciting investors, Marvel Partners made material misrepresentations and omissions, including: (1) falsely guaranteeing investment returns of up to 138% after three days; (2) falsely claiming partnership with J.P. Marvel Investment Advisors, Inc. ("J.P. Marvel"), an actual registered investment adviser; and (3) falsely claiming that Marvel Partners had managed the funds of J.P. Marvel's clients for two years. In fact, according to the Complaint, Marvel Partners was not, nor had it ever been, affiliated with J.P. Marvel. The Commission's Complaint further alleged that the purported investments offered on the Marvel Partners websites were fraudulent and that the purported offering had not been registered with the Commission, as required.
On July 24, 2009, the Commission voluntarily dismissed the claims against the unidentified individuals named in its Complaint as John Does 1-5. The Final Judgment entered on October 15, 2009, applies against the Marvel Partners entities. The Final Judgment holds the three Marvel Partners entities jointly and severally liable for $43,992.44 in disgorgement of ill-gotten gains plus prejudgment interest of $146.64, and imposes a civil penalty of $100,000 against each of the three entities. The Final Judgment also permanently enjoins each of the three Marvel Partners entities from violating the antifraud and securities registration provisions of the securities laws alleged in the Commission's Complaint: Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
