The following excerpt is from the Securities and Exchange Commission website:
March 26, 2012
SEC Charges Operator of Gold Coin Firm with Conducting Fraudulent Securities Offering
The Securities and Exchange Commission today announced that it filed a civil injunctive action against David L. Marion of Minneapolis, Minnesota and his company, International Rarities Holdings, Inc. (“IR Holdings”), accusing them of conducting a fraudulent, unregistered offer and sale of approximately $1 million in securities.
The SEC’s complaint, filed in U.S. District Court in Minneapolis, alleges that from at least November 2008 through July 2009, Marion and IR Holdings raised approximately $1 million from at least 26 investors through the offer and sale of IR Holdings securities. According to the complaint, Marion represented to investors that they were purchasing shares of IR Holdings, which he said was the parent company and 100% owner of International Rarities Corporation (“IR Corp.”). The complaint alleges that IR Corp. is a privately held Minneapolis based gold coin and bullion sales and trading firm that Marion also owned and operated. The complaint further alleges that Marion told investors that their investments were to be used to expand IR Holdings’ business and eventually take it public. According to the complaint, Marion’s representations were false because IR Holdings never owned IR Corp. and thus Marion sold investors shares of a worthless shell company. In addition, the complaint alleges that Marion did not use the investors’ funds to expand IR Holdings’ business and instead diverted the majority of the funds for his own personal use, including for casino gambling.
The SEC’s complaint charges Marion and IR Holdings with violations of 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 SEC is seeking a permanent injunction and disgorgement of ill-gotten gains with prejudgment interest, jointly and severally, against Marion and IR Holdings and a civil penalty against Marion.
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