SEC v. William E. Lyons, No. LR-18674, Eastern District of Virginia — Press Release
raw: William E. Lyons (revised)
William E. Lyons (revised), No. LR-18674
William E. Lyons committed securities fraud by falsely offering a $200 million non-existent foreign bank guarantee to Bear Stearns and three other institutions, claiming it would yield $220 million, and was permanently enjoined, fined $25,000, and barred from broker-dealer association for five years.
The SEC charged William E. Lyons with securities fraud for orchestrating a $200 million prime bank fraud scheme, falsely claiming he could sell a non-existent foreign bank guarantee that would return $220 million in one year. Lyons, operating through the unregistered SV Group, provided fabricated documentation sourced from European entities and failed to conduct any due diligence despite his financial industry experience. He violated Sections 17(a) of the Securities Act and 15(a) of the Exchange Act by acting as an unregistered broker-dealer, and consented to a permanent injunction, a $25,000 civil penalty, and a five-year bar from associating with any broker-dealer.
William E. Lyons committed securities fraud by offering to sell Bear Stearns and three other financial institutions a fraudulent $200 million foreign bank guarantee, falsely claiming it would be worth $220 million after one year. Operating through the unregistered SV Group, Lyons provided fabricated documentation obtained from a network of European individuals and entities, despite having no legitimate basis for the investment and failing to conduct any independent due diligence—even though he had significant experience in the financial services industry. The SEC alleged the entire investment opportunity was fictitious and that Lyons was acting as an unregistered broker-dealer in violation of Sections 17(a) and 15(a) of the federal securities laws. Without admitting or denying the allegations, Lyons consented to a permanent injunction prohibiting future violations of these provisions. He also agreed to pay a $25,000 civil penalty and accepted a five-year bar from association with any broker-dealer, with the possibility of reapplying after that period. The SEC highlighted the case as part of its ongoing efforts to combat prime bank fraud schemes and encouraged the public to report similar suspicious activity. This case underscores the risks of unregistered financial intermediaries exploiting institutional investors with elaborate but entirely false financial instruments.
Extracted insights
- $220.00M $220 million $100M–$1B
- $200.00M $200 million $100M–$1B
- $25K $25,000 $10K–$100K
- organization The Commission
- William E. Lyons offering to sell Bear Stearns & Co. and three other financial institutions a fraudulent foreign bank guarantee for $200 million
- William E. Lyons claimed the fraudulent foreign bank guarantee would be worth $220 million in one year
- The Commission filed a securities fraud lawsuit in the United States District Court for the Eastern District of Virginia
- the defendant consented to the entry of a final judgment that permanently enjoins Lyons from future violations of Section 1
The Commission announced today that it has filed a securities fraud lawsuit in the United States District Court for the Eastern District of Virginia charging William E. Lyons (Lyons) with offering to sell Bear Stearns & Co. (Bear Stearns) and three other financial institutions a fraudulent foreign bank guarantee for $200 million that Lyons claimed would be worth $220 million in one year. Without admitting or denying the allegations in the Commission's complaint, the defendant consented to the entry of a final judgment that permanently enjoins Lyons from future violations of Section 17(a) of the Securities Act of 1933 and Section 15(a) of the Securities Exchange Act of 1934, and imposes a $25,000 monetary penalty on Lyons. Further, Lyons agreed to the entry of an administrative order, following entry of the injunction, that bars Lyons from association with any broker-dealer with a right to reapply after five years. The Commission's complaint alleges that in September 2002, Lyons, operating through SV Group, approached a senior managing director at Bear Stearns - where Lyons had previously been employed as a broker - to sell Bear Stearns a purported "zero coupon bank guarantee note" for $200 million, saying it would be worth $220 million one year after its purchase. Lyons provided Bear Stearns with documentation describing the purported bank guarantee and the transaction that Lyons claimed he and his associates would coordinate in order for Bear Stearns to obtain a bank guarantee issued by a third party. Lyons had obtained the offering materials and other information that he provided to Bear Stearns from a network of individuals and entities located in Europe. Despite significant training and experience in the financial services industry, Lyons failed to conduct any type of independent inquiry into the purported bank guarantees or into the individuals and entities that claimed that they could furnish them. In fact, the investment opportunity that Lyons offered to Bear Stearns did not exist. The Commission's complaint further alleges that during the time that Lyons, through SV Group, were offering the bank guarantee to Bear Stearns and the three other financial institutions, SV Group was not registered with the SEC or the NASD as a broker-dealer and Lyons was associated with an unregistered broker-dealer. For more information about prime bank frauds, visit the SEC's "Prime Bank Information Center" at http://www.sec.gov/divisions/enforce/primebank.shtml. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml. SEC Complaint in this matter
The Commission announced today that it has filed a securities fraud lawsuit in the United States District Court for the Eastern District of Virginia charging William E. Lyons (Lyons) with offering to sell Bear Stearns & Co. (Bear Stearns) and three other financial institutions a fraudulent foreign bank guarantee for $200 million that Lyons claimed would be worth $220 million in one year. Without admitting or denying the allegations in the Commission's complaint, the defendant consented to the entry of a final judgment that permanently enjoins Lyons from future violations of Section 17(a) of the Securities Act of 1933 and Section 15(a) of the Securities Exchange Act of 1934, and imposes a $25,000 monetary penalty on Lyons. Further, Lyons agreed to the entry of an administrative order, following entry of the injunction, that bars Lyons from association with any broker-dealer with a right to reapply after five years. The Commission's complaint alleges that in September 2002, Lyons, operating through SV Group, approached a senior managing director at Bear Stearns - where Lyons had previously been employed as a broker - to sell Bear Stearns a purported "zero coupon bank guarantee note" for $200 million, saying it would be worth $220 million one year after its purchase. Lyons provided Bear Stearns with documentation describing the purported bank guarantee and the transaction that Lyons claimed he and his associates would coordinate in order for Bear Stearns to obtain a bank guarantee issued by a third party. Lyons had obtained the offering materials and other information that he provided to Bear Stearns from a network of individuals and entities located in Europe. Despite significant training and experience in the financial services industry, Lyons failed to conduct any type of independent inquiry into the purported bank guarantees or into the individuals and entities that claimed that they could furnish them. In fact, the investment opportunity that Lyons offered to Bear Stearns did not exist. The Commission's complaint further alleges that during the time that Lyons, through SV Group, were offering the bank guarantee to Bear Stearns and the three other financial institutions, SV Group was not registered with the SEC or the NASD as a broker-dealer and Lyons was associated with an unregistered broker-dealer. For more information about prime bank frauds, visit the SEC's "Prime Bank Information Center" at http://www.sec.gov/divisions/enforce/primebank.shtml. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml. SEC Complaint in this matter