Capital Consultants, LLC, et al

Litigation Release No. 17405 / March 7, 2002

SEC v. Capital Consultants, LLC, et al., Civil Action No. CV 1290 KI (D. Ore.)

SEC CONCLUDES CASE AGAINST BARCLAY L. GRAYSON

The Securities and Exchange Commission (Commission) announced that on February 26, 2002, a federal judge in Portland, Oregon, entered an amended judgment of permanent injunction against Barclay L. Grayson, a principal of Capital Consultants, LLC, an investment adviser located in Portland. The remaining issue in the case was the assessment of a civil penalty against Grayson. The amended judgment does not assess a civil penalty against Grayson based upon sworn statements of financial condition that he submitted to the Commission staff.

The Commission charged Capital Consultants, Barclay Grayson and his father, Jeffrey L. Grayson with fraud and obtained emergency relief against them in September 2000. The complaint alleged that the defendants were operating an undisclosed Ponzi-like scheme in which they used client funds to make interest payments to other clients who were invested in a $160 million loan that Capital Consultants made to Wilshire Credit Corp. On April 30, 2001, the Court entered permanent injunctions against Capital Consultants and the Graysons. Capital Consultants is currently in receivership. In a related criminal action, Barclay Grayson was recently sentenced to two years in prison.