U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23402 / November 9, 2015
Securities and Exchange Commission v. James M. Louks and FiberPoP Solutions, Inc., Civil Action No. 15-cv-3456 (D. Minn., Complaint filed Sept. 1, 2015)
Court Enters Partial Judgment Against James M. Louks and Fiberpop Solutions, Inc.
The Securities and Exchange Commission announced today that on November 4, 2015, the Honorable Patrick J. Schiltz of the United States District Court for the District of Minnesota entered a partial judgment against defendants James M. Louks and FiberPoP Solutions, Inc. ("FiberPoP").
The partial judgment against Louks and FiberPoP imposes a permanent injunction against future violations of certain antifraud provisions of the federal securities laws. The injunction also prohibits Louks and FiberPoP from raising money from investors. Louks and FiberPoP consented to the entry of partial judgment without admitting or denying the SEC's allegations. The partial judgment leaves the issue of the amount of disgorgement, prejudgment interest, and civil penalties to be imposed against Louks and FiberPoP to be decided at a later time.
The SEC's complaint, filed on September 1, 2015, alleges that Louks and FiberPoP have violated Section 17(a) of the Exchange Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The complaint alleges that Louks and FiberPoP have defrauded nearly 100 investors by convincing them to invest in notes that would provide massive returns to the investors within a short period of time and would theoretically help fund FiberPoP's operations. The complaint alleges that these investments typically bore the hallmarks of prime bank schemes, which tout secrecy and involve exaggerated returns in supposedly complex financing instruments that turn out to be fictitious.
The SEC's investigation is continuing.
For more information regarding the dangers of prime bank schemes and tips on how to avoid them, see "Prime Bank" Investments.