Press Release: SEC Files Emergency Enforcement Action to Halt $18.2 Million Cross-Border Prime Bank Scheme; 2006-201; Dec. 5, 2006
The SEC charged Daniel Eric Byer, Malcolm Cameron Boyd Stevenson, Preston David Pinkett II, and International Fiduciary Corp., S.A. with orchestrating an $18.2 million cross-border 'prime bank' fraud targeting over 180 investors in the U.S. Pacific Northwest and British Columbia, leading to a court order freezing assets and mandating fund repatriation.
The SEC alleged that Daniel Eric Byer, Malcolm Cameron Boyd Stevenson, Preston David Pinkett II, and International Fiduciary Corp., S.A. defrauded over 180 investors through a fraudulent 'prime bank' scheme, raising at least $18.2 million by falsely promising access to high-yield, non-public bank trading instruments. The defendants, including a Virginia-based corporation and Canadian nationals, solicited investments in the Pacific Northwest and British Columbia, directing funds to a Virginia bank account, in violation of Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. In response to the SEC’s emergency motion, a federal court froze all defendant assets, prohibited further fund transfers, required an immediate accounting, and ordered repatriation of investor funds to the U.S., with critical assistance from the British Columbia Securities Commission.
The U.S. Securities and Exchange Commission filed an emergency enforcement action on December 4, 2006, against Daniel Eric Byer, Malcolm Cameron Boyd Stevenson, Preston David Pinkett II, and International Fiduciary Corp., S.A. (IFC), accusing them of orchestrating an $18.2 million cross-border 'prime bank' fraud that targeted more than 180 investors in the U.S. Pacific Northwest and British Columbia. The defendants, including a Virginia-based corporation and Canadian nationals, allegedly solicited investments by falsely claiming access to exclusive, high-yield bank trading programs tied to non-existent financial instruments, with investor funds funneled to a bank account in Arlington, Virginia. The SEC charged them with violating Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, alleging unregistered offerings and securities fraud. In response to the SEC’s emergency motion, a federal court issued a temporary restraining order freezing all defendant assets, halting further investor fund transfers, prohibiting document destruction, requiring an immediate accounting, and mandating the repatriation of all investor funds to the United States. The British Columbia Securities Commission played a pivotal role in the investigation, having issued a temporary order on November 1, 2006, to halt sales of IFC investments to British Columbia residents. The SEC emphasized its commitment to combating cross-border prime bank scams and previously issued public warnings about such schemes. Permanent relief sought by the SEC includes permanent injunctions, disgorgement of ill-gotten gains, prejudgment interest, and civil penalties against all defendants.
Extracted insights
- $18.20M $18.2 Million $10M–$100M
- $18.20M $18.2 million $10M–$100M
- person british columbia securities commission
- person daniel eric byer
- person fraudulent prime bank scheme
- person malcolm cameron boyd stevenson
- person preston david pinkett ii
- agency Securities and Exchange Commission
- location virginia
- SEC filed emergency action against Daniel Eric Byer, Malcolm Cameron Boyd Stevenson, Preston David Pinkett II, International Fiduciary Corp., S.A.
- Daniel Eric Byer, Malcolm Cameron Boyd Stevenson, Preston David Pinkett II, International Fiduciary Corp., S.A. defrauded over 180 investors
- Fraudulent Prime Bank Scheme raised $18.2 Million
- International Fiduciary Corp., S.A. is incorporated in Virginia
- Preston David Pinkett II is chairman and CEO of International Fiduciary Corp., S.A.
- Daniel Eric Byer is Canadian
- Malcolm Cameron Boyd Stevenson is Canadian
- Defendants solicited investors in Pacific Northwest and British Columbia
- British Columbia Securities Commission issued Temporary Order on November 1, 2006
- Defendants violated Securities Act of 1933 and Securities Exchange Act of 1934
- Court froze investors' funds and all assets of defendants
- SEC requested permanent injunctions, disgorgement, prejudgment interest, and civil penalties
SEC Files Emergency Enforcement Action to Halt $18.2 Million Cross-Border Prime Bank Scheme Arlington, Va., Company Solicited Investors in British Columbia and Pacific Northwest FOR IMMEDIATE RELEASE 2006-201 Washington, D.C., Dec. 5, 2006 - The U.S. Securities and Exchange Commission filed an emergency action yesterday against Daniel Eric Byer, Malcolm Cameron Boyd Stevenson, Preston David Pinkett II, and International Fiduciary Corp., S.A. (IFC). The Commission alleged that the defendants defrauded over 180 investors in a fraudulent "prime bank" scheme that appears to have raised at least $18.2 million to date. IFC is a Virginia corporation with offices in Arlington, Va. Pinkett, who also lists an Arlington, Va., address, is IFC's chairman and CEO. Byer and Stevenson are Canadians. The complaint alleges that defendants solicited investors in the Pacific Northwest and the Canadian province of British Columbia, including Abbotsford, B.C. According to the SEC's pleadings, investors were requested to, and did, send their investments to a bank in Arlington, Va. Linda Thomsen, Director of the SEC's Enforcement Division, said, "The SEC will work quickly to stop U.S. issuers who illegally offer or sell purported prime bank instruments, whether their victims reside in the U.S. or abroad." Ethiopis Tafara, the Director of the SEC's Office of International Affairs, said, "The SEC's investigation of this case was significantly advanced through the assistance of the British Columbia Securities Commission, and our cooperative efforts have resulted in swift legal action to bring down this international prime bank fraud." On Nov. 1, 2006, the British Columbia Securities Commission issued a Temporary Order and Notice of Hearing ordering the defendants to cease trading the IFC investments to residents of British Columbia. The Commission alleged that the defendants violated the registration and antifraud provisions of the Securities Act of 1933 and the antifraud provisions of the Securities Exchange Act of 1934. As permanent relief, the Commission requested permanent injunctions against future violations, disgorgement, prejudgment interest, and civil penalties as to all defendants. In response to the Commission's request for emergency relief, the Court entered an order that, among other things, temporarily restrains defendants from violating Section 10(b) of the Exchange Act, 15 U.S.C. � 78j(b), Rule 10b-5, 17 C.F.R. � 240.10b-5, and Sections 5 and 17(a) of the Securities Act, 15 U.S.C. �� 77(e) and 77q(a); freezes investors' funds wherever located and all assets of the defendants; prohibits the defendants from accepting or depositing additional funds from actual or potential investors; requires an immediate accounting; prevents document alteration or destruction; expedites discovery; and requires defendants to repatriate all investor funds into the United States. The Commission previously has provided information to investors warning them about prime bank investment scams. That information is available at http://www.sec.gov/divisions/enforce/primebank.shtml # # # Contact: C. Joshua Felker, Assistant Director Division of Enforcement U.S. Securities and Exchange Commission 202-551-4960 Additional materials: Litigation Release 19934 http://www.sec.gov/news/press/2006-201.htm Home | Previous Page Modified: 12/05/2006
SEC Files Emergency Enforcement Action to Halt $18.2 Million Cross-Border Prime Bank Scheme Arlington, Va., Company Solicited Investors in British Columbia and Pacific Northwest FOR IMMEDIATE RELEASE 2006-201 Washington, D.C., Dec. 5, 2006 - The U.S. Securities and Exchange Commission filed an emergency action yesterday against Daniel Eric Byer, Malcolm Cameron Boyd Stevenson, Preston David Pinkett II, and International Fiduciary Corp., S.A. (IFC). The Commission alleged that the defendants defrauded over 180 investors in a fraudulent "prime bank" scheme that appears to have raised at least $18.2 million to date. IFC is a Virginia corporation with offices in Arlington, Va. Pinkett, who also lists an Arlington, Va., address, is IFC's chairman and CEO. Byer and Stevenson are Canadians. The complaint alleges that defendants solicited investors in the Pacific Northwest and the Canadian province of British Columbia, including Abbotsford, B.C. According to the SEC's pleadings, investors were requested to, and did, send their investments to a bank in Arlington, Va. Linda Thomsen, Director of the SEC's Enforcement Division, said, "The SEC will work quickly to stop U.S. issuers who illegally offer or sell purported prime bank instruments, whether their victims reside in the U.S. or abroad." Ethiopis Tafara, the Director of the SEC's Office of International Affairs, said, "The SEC's investigation of this case was significantly advanced through the assistance of the British Columbia Securities Commission, and our cooperative efforts have resulted in swift legal action to bring down this international prime bank fraud." On Nov. 1, 2006, the British Columbia Securities Commission issued a Temporary Order and Notice of Hearing ordering the defendants to cease trading the IFC investments to residents of British Columbia. The Commission alleged that the defendants violated the registration and antifraud provisions of the Securities Act of 1933 and the antifraud provisions of the Securities Exchange Act of 1934. As permanent relief, the Commission requested permanent injunctions against future violations, disgorgement, prejudgment interest, and civil penalties as to all defendants. In response to the Commission's request for emergency relief, the Court entered an order that, among other things, temporarily restrains defendants from violating Section 10(b) of the Exchange Act, 15 U.S.C. � 78j(b), Rule 10b-5, 17 C.F.R. � 240.10b-5, and Sections 5 and 17(a) of the Securities Act, 15 U.S.C. �� 77(e) and 77q(a); freezes investors' funds wherever located and all assets of the defendants; prohibits the defendants from accepting or depositing additional funds from actual or potential investors; requires an immediate accounting; prevents document alteration or destruction; expedites discovery; and requires defendants to repatriate all investor funds into the United States. The Commission previously has provided information to investors warning them about prime bank investment scams. That information is available at http://www.sec.gov/divisions/enforce/primebank.shtml # # # Contact: C. Joshua Felker, Assistant Director Division of Enforcement U.S. Securities and Exchange Commission 202-551-4960 Additional materials: Litigation Release 19934 http://www.sec.gov/news/press/2006-201.htm Home | Previous Page Modified: 12/05/2006