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Tuesday, July 22, 2014

SEC CHARGES TWO WITH VIOLATING FEDERAL SECURITIES LAWS

FROM:  U.S. SECURITIES AND EXCHANGE COMMISSION  
SEC Charges Tyson D. Williams and Stanley D. Parrish with Violations of the Federal Securities Laws

On July 10, 2014, the Securities and Exchange Commission filed a civil injunctive action against Tyson D. Williams (Williams) and Stanley D. Parrish (Parrish), alleging that Williams and Parrish violated the federal securities laws in connection with the sale of securities by ST Ventures, LLC (ST Ventures).

In its Complaint, filed in the U.S. District Court for the District of Utah, the Commission alleges that Williams and Parrish raised over $7 million from approximately 50 investors through the fraudulent and unregistered sale of securities in ST Ventures. The Complaint alleges Williams and Parrish told investors that ST Ventures would purchase collateralized mortgage obligations (CMOs) and then leverage the CMOs to produce a large return for the investor within 30 to 90 days. The Complaint further alleges that Williams and Parrish made material misrepresentations and omissions regarding the investment including, among other things, the risk of the investment and the use of investor funds. Williams and Parrish told investors that their investment principal would never be at risk of loss because investing in CMOs is a very safe and liquid investment and that investor funds would be used only to purchase CMOs. Instead of using investors' funds as represented, the Complaint alleges, virtually all payments made to investors, which totaled more than $1.5 million, came from new investor money and Williams and Parrish misappropriated over $3.5 million of investors' proceeds for their personal use.

The Commission alleges that by engaging in this conduct Williams and Parrish violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks a permanent injunction as well as disgorgement, prejudgment interest and a civil penalty from Williams and Parrish.

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