SEC v. Devon D. Archer; Bevan T. Cooney; Hugh Dunkerley; Jason W. Galanis; John P. Galanis; Gary T. Hirst, et al., No. 15 Cr. 0643 (PKC), Southern District of New York (Nov. 16, 2016) — Complaint

ANDREW 
M. 
CALAMARI
REGIONAL 
DIRECTOR
Sanjay 
Wadhwa
Nancy 
A. 
Brown
Tejal 
D. 
Shah
H. 
Gregory 
Baker
Adam 
S. 
Grace
Attorneys 
for 
the 
Plaintiff
SECURITIES 
AND 
EXCHANGE 
COMMISSION
New 
York 
Regional 
Office
Brookfield 
Place
200 
Vesey 
Street, 
Suite 
400
New 
York, 
New 
York 
10281-1022
(212) 
336-1023 
(Brown)
UNITED 
STATES 
DISTRICT 
COURT
SOUTHERN 
DISTRICT 
OF 
NEW 
YORK
----------------------------------------------------------------------- 
x
SECURITIES 
AND 
EXCHANGE 
COMMISSION,
Plaintiff,
v
.
DEVON 
D. 
ARCHER, 
BEVAN 
T. 
GOONEY,
HUGH 
DUNKERL~Y, 
JASON 
W. 
GALANIS,
JOHN 
P. 
GALANIS, 
GARY 
T. 
HIRST,
MICHELLE 
A. 
MORTON 
and
F12ANCISCO 
MARTIN,
Defendants. 
----------------------------------------------------------------------- 
x
16 
Civ. 
3505 
(WHP)
ECF 
Case
AMENDED 
COMPLAINT
AND 
JURY 
DEMAND
Plaintiff 
Securities 
and 
Exchange 
Commission 
("Commission"), 
for 
its 
Amended
Complaint 
against 
Defendants 
Devon 
D. 
Archer 
("Archer"), 
Bevan 
T. 
Cooney 
("Cooney"),
Hugh 
Dunkerley 
("Dunkerley"), 
Jason 
W. 
Galanis 
("Jason 
Galanis"), 
John 
P. 
Galanis 
("John
Galanis"), 
Gary 
T. 
Hirst 
("Hirst"), 
Michelle 
A. 
Morton 
("Morton"), 
and 
Francisco 
Martin 
(also
known 
as 
Francisco 
Martin 
Fernandez) 
("Martin") 
(together, 
the 
"Defendants"), 
alleges 
as
follows:

SUMMARY 
OF 
THE 
ALLEGATIONS
1. 
This 
case 
involves 
a 
fraudulent 
scheme 
orchestrated 
by 
Jason 
Galanis 
to 
obtain
undisclosed 
control 
over 
two 
aegistered 
investment 
advisers 
so 
that 
over 
$43 
million 
of 
their
clients' 
funds 
could 
be 
invested 
in 
sham 
Native 
American 
tribal 
bonds 
(hereinafter, 
the 
"bonds"
or 
"Tribal 
Bonds"), 
and 
ultimately 
diverted 
to 
him 
and 
his 
associates 
and 
the 
entities 
they
controlled 
at 
the 
expense 
of 
unwitting 
investors.
2. 
To 
carry 
out 
the 
Tribal 
Bond 
scheme, 
Jason 
Galanis 
enlisted 
his 
father 
(John
Galanis) 
and 
six 
of 
his 
associates, 
Archer, 
Cooney, 
Dunkerley, 
Hirst, 
Morton, 
and 
Martin. 
As
Jason 
Galanis 
told 
Cooney 
and 
Archer 
prior 
to 
the 
first 
issuance 
of 
the 
Tribal 
Bonds, 
the
"primary 
objective" 
was 
"to 
get 
us 
a 
source 
of 
discretionary 
liquidity" 
—liquidity 
Jason 
Galanis
would 
use 
to 
fund 
his 
and 
his 
father's 
lavish 
lifestyles, 
and 
to 
expand 
the 
corporate 
empire 
in
which 
he, 
Archer 
and 
Cooney 
had 
invested. 
Jason 
Galanis 
brought 
on 
Hirst, 
Dunkerley, 
Morton
and 
Martin 
as 
needed, 
and 
compensated 
them 
for 
the 
roles 
they 
knowingly 
assumed 
as 
front 
nnen
and 
facilitators.
3. 
Jason 
Galanis 
and 
John 
Galanis 
kicked 
off 
the 
scheme 
in 
March 
2014, 
when 
they
convinced 
a 
Native 
American 
tribal 
corporation, 
the 
Wakpamni 
Lake 
Community 
Corporation,
affiliated 
with 
the 
Wakpamni 
District 
of 
the 
Oglala 
Sioux 
Nation, 
whose 
members 
live 
in 
one 
of
the 
poorest 
regions 
in 
the 
United 
States 
(the 
"WLCC"), 
to 
become 
the 
issuer 
of 
the 
limited
recourse 
bands 
that 
they 
had 
already 
structured 
and 
developed. 
From 
August 
2014 
to 
April
2015, 
Jason 
Galanis 
and 
John 
Galanis 
arranged 
for 
WLCC 
to 
issue 
three 
tranches 
of 
Tribal
Bonds.
4. 
I-Iaving 
secured 
an 
issuer, 
Jason 
Galanis 
and 
his 
associates 
needed 
investors 
to
buy 
the 
Tribal 
Bonds, 
and 
they 
found 
them 
in 
the 
unsuspecting 
clients 
of 
two 
investment
2

advisers 
over 
which 
Jason 
Galanis 
and 
his 
associates 
gained 
control. 
In 
July 
2014, 
Jason 
Galanis
arranged 
the 
purchase 
of 
investment 
adviser 
Hughes 
Capital 
Ma~►agement, 
LLC 
("Hughes") 
—
which 
managed 
approximately 
$900 
million 
for 
various 
pension 
funds 
—and 
installed 
Morton 
as
CEO 
and 
part 
owner. 
And, 
in 
Apri12015, 
Jason 
Galanis 
arranged 
for 
Hughes 
to 
acquire 
another
investment 
adviser 
with 
still 
more 
pension 
fund 
clients' 
funds 
under 
management, 
Atlantic 
Asset
Management 
LLC 
("AAM"), 
and 
put 
Morton 
in 
charge 
of 
the 
larger 
enterprise. 
Jason 
Galanis
arranged 
for 
Valor 
Group 
Ltd. 
("Valor 
Group"), 
an 
entity 
controlled 
by 
Jason 
Galanis, 
Archer,
Dunkerley 
and 
others, 
to 
provide 
the 
financing 
for 
both 
purchases 
through 
its 
wholly
-owned
insurance 
company 
subsidiaries 
Wealth
-Assurance 
AG 
("Wealth
-Assurance") 
and 
Valorlife
Lebensversicherungs 
AG 
("Valorlife"), 
informing 
Archer 
and 
Cooney 
that 
this 
acquisition
promised 
greater 
"liquidity" 
for 
"their 
various 
projects."
5. 
Morton 
understood 
that 
Vator 
Group's 
financing 
of 
both 
acquisitions 
was
contingent 
on 
her 
agreement 
to 
invest 
Hughes' 
and 
AAM's 
clients' 
funds 
in 
the 
Tribal 
Bonds. 
In
August 
2014, 
at 
the 
direction 
of 
Jason 
Galanis, 
Morton 
hired 
Hirst 
at 
Hughes 
and 
authorized
Hirst 
to 
purchase 
$27 
million 
of 
Tribal 
Bonds 
on 
behalf 
of 
nine 
Hughes 
clients. 
In 
Apri12015,
again 
at 
the 
direction 
of 
Jason 
Galanis, 
Morton 
used 
$16.2 
million 
of 
an 
AAM 
client's 
funds 
to
buy 
Tribal 
Bonds.
6. 
According 
to 
the 
trust 
indentures 
and 
other 
documents 
relating 
to 
the 
Tribal 
Bond
issuances, 
the 
proceeds 
from 
each 
issuance 
were 
primarily 
to 
be 
invested 
in 
an 
annuity 
to 
benefit
WLCC 
and 
generate 
sufficient 
income 
to 
pay 
interest, 
and 
ultimately 
to 
repay 
the 
principal, 
to
the 
bond 
holders. 
In 
connection 
with 
each 
bond 
issuance, 
WLCC 
entered 
into 
an 
annuity
contract 
with 
Wealth 
Assurance 
Private 
Client 
Corporation 
("WAPCC"), 
an 
entity 
described 
in 
a
private 
placement 
memorandum 
as 
a 
subsidiary 
of 
Valor 
Group. 
Pursuant 
to 
each 
annuity
3

contract, 
the 
bond 
proceeds 
were 
to 
be 
managed 
by 
an 
independent 
investment 
manager, 
Private
Equity 
Management 
LLC 
("PEM"), 
in 
a 
separately 
managed 
account 
at 
WAPCC.
7. 
However, 
PEM 
was 
a 
fake 
entity 
created 
at 
the 
behest 
of 
Jason 
Galanis 
solely 
to
act 
as 
a 
conduit 
of 
the 
proceeds 
from 
the 
bond 
issuance 
to 
Jason 
Galanis 
and 
his 
associates.
Jason 
Galanis 
paid 
Martin 
$150,000 
to 
sign 
the 
annuity 
contracts 
as 
the 
purported 
"Managing
Director" 
or 
"Portfolio 
Manager" 
of 
PEM, 
but 
Martin 
never 
provided 
any 
investment
management 
services. 
Instead, 
Jason 
Galanis 
gained 
undisclosed 
control 
over 
the 
bond
proceeds, 
anc~ 
he 
and 
the 
other 
Defendants 
used 
the 
proceeds 
for 
their 
personal 
benefit, 
including
to 
purchase 
luxury 
goods, 
pay 
the 
criminal 
defense 
costs 
of 
John 
Galanis 
and 
Jason 
Galanis 
in 
a
previously 
charged 
case, 
boost 
the 
net 
capital 
of 
two 
broker
-dealers 
in 
which 
Archer 
and 
Cooney
had 
interests, 
and 
finance 
the 
initial 
public 
offering 
of 
"Technology 
Company," 
a 
corporation 
in
which 
Jason 
Galanis, 
Hirst, 
Cooney, 
Dunkerley 
and 
Archer 
held 
shares, 
and 
for 
which 
Jason
Galanis 
served 
as 
an 
"advisor."
8. 
In 
September 
2015, 
Jason 
Galanis, 
John 
Galanis 
and 
Hirst 
were 
charged 
both 
by
the 
Commission 
and 
by 
a 
grand 
jury 
convened 
by 
the 
United 
States 
Attorney's 
Office 
for 
the
Southern 
District 
of 
New 
York 
("USAO") 
with 
securities 
fraud 
arising 
out 
of 
a 
different 
and
unrelated 
scheme. 
SEC 
v. 
Galanis, 
et. 
al., 
15 
Civ. 
7547 
(VSB) 
(S.D.N.Y.) 
("SEC 
v. 
Galanis");
and 
United 
States 
v. 
Jason 
Galanis, 
et 
al., 
15 
Cr. 
0643 
(PKC) 
(S.D.N.Y.) 
("US 
v. 
Galanis")
Jason 
Galanis 
pled 
guilty 
to 
two 
counts 
of 
conspiracy 
to 
commit 
securities 
fraud, 
and 
one 
count
each 
of 
securities 
fraud 
and 
investment 
adviser 
fraud. 
John 
Galanis 
pled 
guilty 
to 
one 
count 
each
of 
conspiracy 
to 
commit 
securities 
fraud 
and 
securities 
fraud. 
Hirst 
was 
convicted 
after 
a 
jury
trial 
of 
one 
count 
each 
of 
conspiracy 
to 
commit 
securities 
fraud, 
securities 
fraud, 
conspiracy 
to
commit 
wire 
fraud, 
and 
wire 
fraud.
~!

9. 
While 
free 
on 
bail, 
Jason 
Galanis 
continued 
to 
further 
the 
fraudulent 
scherrie
described 
herein 
by, 
among 
other 
things, 
orchestrating 
payments 
to 
the 
Tribal 
Bond 
indenture
trustee 
to 
fund 
the 
Tribal 
Bonds' 
interest 
payment 
obligations 
as 
they 
came 
due.
VIOLATIONS
10. 
By 
virtue 
of 
the 
conduct 
alleged 
herein, 
each 
of 
the 
Defendants, 
directly 
or
indirectly, 
singly 
or 
in 
concert, 
violated 
and 
are 
otherwise 
liable 
for 
violations 
of 
the 
federal
securities 
laws 
as 
follows:
11. 
Jason 
Galanis 
violated:
• 
Sections 
17(a)(1) 
and 
(3) 
of 
the 
Securities 
Act 
of 
1933 
("Securities 
Act") 
[15
U.S.C. 
§§ 
77q(a)(1) 
and 
(3)]; 
and,
• 
Section 
10(b) 
of 
the 
Securities 
Exchange 
Act 
of 
1934 
("Exchange.AcY') 
[15
U.S.C. 
§ 
78j(b)], 
and 
Rules 
lOb-5(a) 
and 
(c) 
thereunder 
[17 
C.F.R. 
§§
240.1Ob-5(a) 
and 
(c)].
12. 
Archer, 
Cooney, 
Dunkerley, 
John 
Galanis, 
Hirst 
and 
Martin 
violated:
• 
Sections 
17(a)(1) 
and 
(3) 
of 
the 
Securities 
Act 
[15 
U.S.C. 
§§ 
77q(a)(1) 
and
(3)], 
or, 
in 
the 
alternative, 
Section 
15(b) 
of 
the 
Securities 
Act 
[15 
U.S.C. 
§
77o(b)], 
by 
aiding 
and 
abetting 
Jason 
Galanis's 
violations 
of 
Sections 
17(a)(1)
and 
(3) 
of 
the 
Securities 
Act 
[15 
U.S.C. 
§§ 
77q(a)(1) 
an 
(3)]; 
and,
Section 
10(b) 
of 
the 
Exchange 
Act 
[15 
U.S.C. 
§ 
78j(b)], 
and 
Rules 
lOb-5(a)
and 
(c) 
thereunder 
[17 
C.F.R. 
§§ 
240.1Ob-5(a) 
and 
(c)], 
or, 
in 
the 
alternative,
Section 
20(e) 
of 
the 
Exchange 
Act 
[15 
U.S.C. 
§ 
78t(e)] 
by 
aiding 
and
abetting 
Jason 
Galanis's 
violations 
of 
Section 
10(b) 
of 
the 
Exchange 
Act 
[15
5

U.S.C. § 
78j(b)], and 
Rules I 
Ob-5(a) and (c) 
thereunder• [17 C.F.R. §§
240.1Ob-5(a) 
and (c)];
13. 
Morton violated:
• 
Section 10(b) 
of the Exchange 
Act [15 
U.S.C. § 78j(b)], and Rules 
lOb-5(a),
(b) and (c) 
thereunder [17 C.F.R. §§ 
240.1Ob-5(a), 
(b) and (c)];
• 
Sections 
206(1), 
206(2) and 
206(4) of the Investment Advisers 
Act of 
1940
("Advisers 
Act") [15 U.S.C. §§ 
80b-6(1), 
(2), and (4)J, and Rule 206(4)-8
thereunder [17 
C.F.R. § 
275.206(4)-8]; and,
• 
Section 
2090 
of the Advisers 
Act [15 
U.S.C. §  80b-9(~] by aiding 
and
abetting Hughes' 
and 
AAM's violations of 
Sections 
206(1) and 206(2) of the
Advisers 
Act [15 U.S.C. §§ 
80b-6(1) and (2)] and aiding and 
abetting
AAM's 
violation of 
Section 206(4) of the 
Advisers Act [15 
U.S.C. § 80b-
6(4)], and 
Rule 206(4)-8 
thereunder [17 
C.F.R. § 275.206(4)-8].
JURISDICTION 
AND 
VENUE
14. The 
Commission brings this action 
pursuant to 
the authority conferred upon 
it 
by
Section 20(b) 
of 
the Securities Act [15 
U.S.C. § 
77t(b)], Sections 
21(d)(1) and 
21(d)(5) of the
Exchange Act [15 U.S.C. §§ 
78u(d)(1) and 
78u(d)(5)] and 
Section 209(d) of the Advisers 
Act
[15 U.S.C. ~ 
80b
-9(d)], seeking a 
final 
judgment: (a) restraining 
and 
permanently enjoining each
of the Defendants 
from 
engaging in the acts, 
practices and 
courses of business alleged 
against
them 
herein; (b) 
ordering each of 
the 
Defendants to 
disgorge 
all 
ill-gotten gains 
and to pay
prejudgment interest 
on 
those amounts; (c) prohibiting 
Jason 
Galanis, 
Archer and 
Dunkerley
from acting as 
an 
officer or director of a 
public 
company pursuant to Section 
20(e) of the
Securities 
Act [15 
U.S.C. § 
77t(e)] and Jason 
Galanis, Archer, 
Dunker~ey and 
Morton from
D

acting 
as 
an 
officer 
or 
director 
of 
a 
public 
company 
pursuant 
to 
Section 
21(d)(2) 
of 
the
Exchange 
Act 
[15 
U.S.C. 
§ 
78u(d)(2)]; 
and 
(d) 
imposing 
civil 
money 
penalties 
on 
Jason 
Galanis,
Archer, 
Cooney, 
Dunkerley, 
John 
Galanis, 
Hirst 
and 
Martin 
pursuant 
to 
Section 
20(d) 
of 
the
Securities 
Act 
[15 
U.S.C. 
§ 
77t(d)]; 
on 
Jason 
Galanis, 
Archer, 
Cooney, 
Dunkerley, 
John 
Galanis,
Hirst, 
Morton 
and 
Martin 
pursuant 
to 
Section 
21(d)(3) 
of 
the 
Exchange 
Act 
[15 
U.S.C. 
§
78u(d)(3)], 
and 
on 
Morton 
pursuant 
to 
Section 
209(e) 
of 
the 
Advisers 
Act 
[15 
U.S.C. 
§ 
80b
-
9(e)].
15. 
This 
Couirt 
has 
jurisdiction 
over 
this 
action, 
and 
venue 
lies 
in 
this 
District,
pursuant 
to 
Section 
22(a) 
of 
the 
Securities 
Act 
[15. 
U.S.C. 
§ 
77v(a)] 
,Sections 
21(d) 
and 
27 
of
the 
Exchange 
Act 
[15. 
U.S 
.C. 
§§ 
78u(e) 
and 
78aa], 
and 
Section 
214 
of 
the 
Advisers 
Act 
[15
U.S.C. 
§ 
80b-14]. 
The 
Defendants, 
directly 
or 
indirectly, 
made 
use 
of 
the 
means 
or 
instruments
of 
transportation 
or 
communication 
in 
interstate 
commerce, 
or 
of 
the 
mails, 
or 
of 
a 
facility 
of 
a
national 
securities 
exchange, 
in 
connection 
with 
the 
transactions, 
acts, 
practices, 
or 
courses 
of
business 
alleged 
herein, 
certain 
of 
which 
occurred 
in 
this 
District. 
For 
example, 
Burnham
Securities 
Inc. 
("Burnham 
Securities"), 
the 
placement 
agent 
for 
the 
sale 
of 
the 
Tribal 
Bonds, 
is
located 
in 
New 
York, 
New 
York.
DEFENDANTS
16. 
Jason 
Galanis, 
age 
45, 
resides 
in 
Los 
Angeles, 
California. 
Jason 
Galanis 
was 
the
subject 
of 
a 
prior• 
Commission 
enforcement 
action, 
SEC 
v. 
Penthouse 
Int'1, 
Inc., 
et 
al., 
OS 
Civ.
0780 
(S.D.N.Y.), 
for 
engaging 
in 
accounting 
fraud 
and 
financial 
reporting 
violations. 
On 
April
27, 
2007, 
pursuant 
to 
a 
settlement 
with 
the 
Commission, 
he 
was 
enjoined 
from 
violating 
Sections
10(b) 
and 
15(d) 
of 
the 
Exchange 
Act, 
including 
Rule 
l 
Ob-5, 
and 
was 
barred 
from 
serving 
as 
an
officer 
and 
director 
of 
a 
public 
company 
for 
a 
period 
of 
five 
years, 
a 
bar 
which 
expired 
in 
2012.
7

In 
September 
2015, 
Jason 
Galanis 
was 
sued 
by 
the 
Commission 
and 
indicted 
by 
a 
grand 
jury
convened 
by 
the 
USAO, 
based 
on 
allegations 
that 
he 
orchestrated 
a 
fraudulent 
and 
unregistered
public 
distribution 
of 
millions 
of 
dollars 
of 
shares 
of 
a 
publicly 
traded 
company, 
Gerova
Financial 
Group, 
Ltd. 
("Gerova"). 
See 
SEC 
v. 
Galanis; 
US 
v. 
Galanis. 
He 
has 
since 
pled 
guilty
to 
various 
securities 
laws 
violations 
in 
US 
v. 
Galanis 
and 
is 
incarcerated 
pending 
his 
sentencing
in 
that 
matter.
17. 
John 
Galanis, 
age 
73, 
resides 
in 
Oceanside, 
California. 
John 
Galanis 
is 
the 
father
of 
Jason 
Galanis, 
and 
has 
been 
the 
subject 
of 
numerous 
prior 
criminal 
proceedings, 
as 
well 
as
enforcement 
actions 
by 
the 
Commission, 
dating 
back 
to 
the 
late 
1960s. 
Most 
recently, 
John
Galanis 
was 
charged 
by 
the 
SEC 
and 
USAO 
for 
his 
alleged 
involvement 
in 
the 
Gerova 
scheme.
See 
SEC 
v. 
Galanis; 
US 
v. 
Galanis. 
Like 
his 
son, 
Jason, 
John 
Galanis 
pled 
guilty 
to 
various
securities
-related 
violations 
in 
US 
v. 
Galanis, 
and 
awaits 
sentencing.
18. 
Archer, 
age 
42, 
resides 
in 
Brooklyn, 
New 
York. 
Archer 
was, 
at 
times 
relevant
herein, 
a 
director, 
officer 
and 
direct 
or 
indirect 
owner 
of 
and/or 
investor 
in 
various 
entities
connected 
to 
the 
Tribal 
Bond 
scheme 
including 
Valor 
Group, 
Valorlife, 
COR 
Fund 
Advisors
LLC 
("CORFA"), 
Burnham 
Financial 
Group, 
the 
holding 
company 
for 
broker
-dealer 
Burnham
Securities, 
BAM 
Holdings, 
LLC, 
the 
holding 
company 
for 
investment 
management 
companies
operating 
under 
the 
Burnham 
name, 
including 
Burnham 
Asset 
Management 
Corporation
("BAM"), 
Rosemont 
Seneca 
Bohai 
LLC 
("RSB"), 
a 
Delaware 
limited 
liability 
corporation 
that
he 
wholly 
owns, 
and 
BOE 
Capital, 
LLC, 
a 
Delaware 
limited 
liability 
corporation 
that 
he 
wholly
owned 
as 
of 
August 
12, 
2014.
19. 
Cooney, 
age 
43, 
resides 
in 
Incline 
Village, 
Nevada. 
Jason 
Galanis 
has 
described
Cooney 
as 
his 
"best 
friend 
of 
23 
years 
and 
equity 
holder 
in 
all 
the 
businesses." 
At 
all 
relevant

times 
herein, 
Cooney 
was 
a 
direct 
or 
indirect 
owner 
of 
CORFA, 
through 
which 
he 
owned 
an
interest 
in 
Burnham 
Securities.
20. 
Dunkerley, 
age 
41, 
resides 
in 
Irvine, 
California. 
At 
relevant 
times 
herein, 
he
served 
as 
the 
Director, 
President, 
Executive 
Vice 
President 
and 
Secretary 
of 
Valor 
Group,
Director 
of 
Wealth
-Assurance, 
Director 
of 
Valorlife 
and 
a 
Managing 
Director 
of 
Burnham
Securities. 
He 
is 
currently 
Sole 
Director 
and 
President 
of 
WAPCC 
and 
Managing 
Member 
of
BFG 
Socially 
Responsible 
Investing 
Limited 
("BFG 
Investments"), 
having 
been 
installed 
in 
each
of 
these 
management 
positions 
by 
Jason 
Galanis. 
At 
all 
relevant 
times, 
Dunkerley 
acted 
at 
the
direction 
of 
Jason 
Galanis 
or 
with 
his 
knowledge.
21. 
Hirst, 
age 
63, 
resides 
in 
Lake 
Mary, 
Florida, 
but 
is 
currently 
incarcerated 
pending
his 
sentencing 
in 
US 
v. 
Galanis. 
He 
served 
as 
Hughes' 
Chief 
Investment 
Officer 
("CIO") 
in
August 
2014 
and 
directed 
the 
investment 
of 
over 
$27 
million 
of 
Hughes' 
clients' 
funds 
in 
Tribal
Bonds. 
Hirst 
is 
the 
Assistant 
Secretary 
of 
WAPCC 
and 
signatory 
on 
its 
bank 
account. 
In
September 
2015, 
Hirst 
was 
charged 
by 
the 
Commission 
and 
the 
USAO 
along 
with 
Jason 
Galanis
and 
John 
Galanis 
in 
connection 
with 
the 
Gerova 
scheme. 
See 
SEC 
v. 
Galanis; 
US 
v. 
Galanis.
On 
September 
28, 
2016, 
a 
jury 
convicted 
Hirst 
of 
various 
securities
-related 
violations 
in 
US 
v.
Galanis
.
22. 
Morton, 
age 
55, 
resides 
in 
Colonia, 
New 
Jersey. 
She 
served 
as 
the 
CEO 
of
Hughes 
and 
AAM, 
and 
owned 
an 
interest 
in 
Hughes' 
and 
AAM's 
parent 
company, 
GMT 
Duncan
LLC 
("GMT"). 
In 
her 
capacity 
as 
CEO 
of 
Hughes 
and 
AAM, 
Morton 
oversaw 
the 
investment 
of
over 
$43 
million 
of 
client 
funds 
in 
Tribal 
Bonds.
23. 
Martin, 
age 
42, 
resides 
in 
Woodland 
Hills, 
California. 
Until 
June 
2016, 
Martin
was 
the 
sole 
owner 
and 
CCO 
of 
Malaga 
Asset 
Management, 
LLC, 
an 
SEC
-registered 
investment
7

adviser. At times relevant 
herein, 
Martin held himself out as 
Portfolio Manager and/or
Managing Director of PEM.
OTHCR 
RELEVANT ENTITIES
24. 
Burnham Securities, 
an SEC
-registered broker 
dealer based in 
New York, New
York, served as 
the placement 
agent for the Tribal Bonds. 
At 
all relevant tunes, Burnham
Securities 
was 
wholly owned by 
Burnham 
Financial Group. 
Beginning in 2014, 
Jason
Galanis, Archer 
and Cooney 
gained control of Burnham 
Financial Group and Burnham
Securities, 
through, at least in part, 
CORFA, 
a 
Delaware limited 
liability company 
in which
Jason Galanis, 
Archer and Cooney 
held direct or 
indirect 
ownership interests at relevant times
herein.
25. WAPCC was 
incorporated by 
Dunkerley in the 
British Virgin Islands and was
purportedly the 
annuity provider in 
connection 
with the Tribal Bonds. 
Dunkerley also
incorporated a company 
called WAPCC 
in Florida and 
opened an 
associated bank account 
(the
"WAPCC 
Account") 
for which he and 
Hirst are the 
only signatories, and to which 
the net 
Tribal
Bond 
proceeds were sent by 
the 
Indenture trustee.
26. 
Valor Group was 
incorporated 
as 
Wealth Assurance Holdings Ltd. by 
Dunkerley
in the 
British Virgin Islands 
in 2013, 
and changed its 
name 
to 
Valor 
Group Ltd. in December
2014. 
Through 
Thorsdale Fiduciary 
and 
Guaranty Company Ltd. 
("Thorsdale"), a 
Nevada
incorporated family 
trust company 
Jason Galanis controls, 
Jason Galanis 
holds a significant
ownership 
interest in Wealth Assurance 
Holdings 
Ltd., and its successor, 
Valor Group. 
In 2013,
Wealth Assurance Holdings 
Ltd. 
purchased Wealth
-Assurance, and 
Dunkerley was appointed
to Wealth
-Assurance's 
Board of Directors. In 
November 2014, Wealth 
Assurance 
Holdings 
Ltd.
acquired 
Valorlife. 
Jason Galanis 
became a paid 
advisor to Valorlife's Board of 
Directors 
in
10

December• 
2014. 
Wealth
-Assurance 
provided 
the 
financing 
for 
GMT's 
purchase 
of 
Hughes, 
and
Valorlife 
provided 
the 
financing 
for 
GMT's 
purchase 
of 
AAM. 
In 
addition, 
Wealth
-Assurance's
subsidiary, 
BFG 
Investments, 
became 
an 
indirect 
owner 
of 
Hughes 
and 
AAM 
by 
virtue 
of 
an
ownership 
interest 
it 
acquired 
in 
GMT.
27. 
AAM 
is 
an 
SEC
-registered 
investment 
adviser 
which 
was 
principally 
located 
in
Stamford, 
Connecticut. 
In 
Apri12015, 
AAM 
was 
purchased 
by 
GMT 
and 
merged 
with 
Hughes,
an 
SEC
-registered 
investment 
adviser, 
which 
was 
principally 
located 
in 
Alexandria, 
Virginia.
The 
merged 
entity 
retained 
AAM's 
name. 
AAM 
was 
charged 
by 
the 
Commission 
in 
connection
with 
its 
investment 
of 
client 
funds 
in 
the 
Tribal 
Bonds 
in 
December 
2015 
and 
is 
now 
in
receivership 
and 
in 
the 
process 
of 
winding 
down. 
See 
SEC 
v. 
AAM, 
15 
Civ. 
9764 
(WHP)
(S.D.N.Y).
28. 
PEM 
was 
a 
company 
set 
up 
by 
Martin 
and 
purportedly 
domiciled 
in 
the 
British
Virgin 
Islands. 
Martin 
acted 
as 
its 
Managing 
Director 
and 
Portfolio 
Manager. 
Martin 
signed 
the
Investment 
Management 
agreement 
with 
WLCC 
on 
behalf 
of 
PEM 
for 
each 
of 
the 
tranches 
of
Tribal 
Bond 
issuances 
described 
below, 
even 
though 
he 
understood 
that 
neither 
he 
nor 
PAM
would 
have 
any 
role 
for 
carrying 
out 
the 
functions 
assigned 
to 
him 
in 
the 
agreement. 
The
Investment 
Management 
agreement 
designated 
PEM 
as 
the 
independent 
Investment 
Manager 
for
the 
Tribal 
Bond 
proceeds 
and 
gave 
it 
the 
authority 
to 
direcfi 
the 
investment 
of 
the 
proceeds
pursuant 
to 
certain 
stated 
investment 
guidelines.
FACTS
29. 
The 
Tribal 
Bond 
scheme 
orchestrated 
by 
Jason 
Galanis 
consisted 
of 
four 
parts: 
1)
pitching 
WLCC 
to 
issue 
the 
Tribal 
Bonds; 
2) 
engineering 
the 
Tribal 
Bond 
issuances 
to 
give
Jason 
Galanis 
and 
his 
associates 
undisclosed 
control 
over 
the 
Tribal 
Bond 
proceeds; 
3) 
securing

victims 
to 
purchase 
the 
Tribal 
Bonds; 
and 
4) 
misappropriating 
the 
Tribal 
Bond 
proceeds 
for 
the
benefit 
of 
Jason 
Galanis 
and 
his 
associates, 
including 
the 
Defendants.
30. 
E
-mails 
among 
Jason 
Galanis, 
Archer 
and 
Cooney 
reflect 
their 
intent, 
from 
the
outset 
of 
the 
scheme, 
to 
control 
and 
use 
the 
proceeds 
from 
the 
Tribal 
Bonds 
for 
their 
personal
benefit. 
In 
April 
2014, 
when 
an 
initial 
issuance 
of 
$20 
million 
bonds 
appeared 
imminent, 
Jason
Galanis 
e
-mailed 
Archer 
and 
Cooney: 
"$2Q 
mm 
bond 
approved. 
Proceeds 
are 
$15 
mm 
to 
us 
and
5 
mm 
to 
them." 
In 
July 
2014, 
after 
WLCC 
had 
approved 
issuing 
the 
bonds, 
Jason 
Galanis 
e
-
mailed 
Archer 
and 
Cooney: 
"My 
primary 
objective 
is 
to 
get 
us 
a 
source 
of 
discretionary
liquidity. 
Sick 
of 
begging."
A.
 
The 
Pitch: 
John 
Galanis 
Finds 
a 
Bond 
Issuer.
31. 
John 
Galanis 
handled 
the 
initial 
efforts 
to 
find 
a 
bond 
issuer 
for 
the 
scheme. 
In 
or
about 
March 
2014, 
John 
Galanis 
attended 
a 
Native 
American 
economic 
development 
conference
in 
Las 
Vegas, 
Nevada 
and 
made 
a 
presentation 
to 
several 
tribes 
regarding 
a 
prospective 
Native
American 
bond 
issuance. 
John 
Galanis 
purported 
to 
be 
representing 
Burnham 
Securities, 
even
though 
he 
had 
no 
official 
connection 
to 
Burnham 
Securities.
32. 
John 
Galanis's 
presentation 
to 
prospective 
Native 
American 
bond 
issuers 
had 
all
the 
necessary 
players 
(except 
the 
issuer) 
in 
place, 
including 
Burnham 
Securities 
as 
the 
Placement
Agent. 
During 
the 
conference, 
a 
representative 
of 
WLCC 
indicated 
to 
John 
Galanis 
that 
WLCC
would 
be 
interested 
in 
participating 
in 
the 
issuance. 
John 
Galanis 
was 
WLCC's 
primary 
point 
of
contact 
regarding 
the 
Tribal 
Bonds 
throughout 
the 
scheme 
and 
induced 
WLCC 
to 
issue 
each
tranche 
of 
Tribal 
Bonds.
12

B. 
The 
Tribal 
Bonds 
Are 
Structured 
to 
Allow 
Jason 
Galanis 
and 
Dunkerley 
to
Control 
the 
Bond 
Proceeds.
33. 
Jason 
Galanis 
and 
John 
Galanis 
arranged 
for 
WLCC 
to 
issue 
three 
tranches 
of
Tribal 
Bonds: 
a) 
$27,077,436 
in 
August 
2014; 
b) 
$20,000,000 
in 
September 
2014; 
and 
c)
$16,200;000 
in 
Apri12015. 
The 
first 
and 
last 
issuances 
defrauded 
investment 
adviser 
clients 
of
Hughes 
and 
AAM. 
The 
middle 
issuance 
did 
not 
represent 
an 
additional 
capital 
raising 
event;
instead, 
bond 
proceeds 
from 
the 
first 
issuance 
were 
used 
to 
purchase 
newly 
issued 
Tribal 
Bonds,
so 
that 
Jason 
Galanis, 
Archer, 
Cooney 
and 
Dunkerley 
could 
obtain 
$20 
million 
worth 
of 
bonds
for 
their 
own 
use 
without 
any 
capital 
outlay 
on 
their 
part.
34. 
To 
Jason 
Galanis, 
the 
Tribal 
Bonds 
were 
simply 
a 
source 
of 
cash, 
providing 
him
with 
the 
liquidity 
he 
needed 
to 
expand 
the 
corporate 
empire 
he 
sought 
to 
assemble 
with 
Archer,
Cooney 
and 
Dunkerley. 
In 
one 
revealing 
email 
to 
Archer 
and 
Cooney 
from 
August 
2014, 
Jason
Galanis 
proposed 
an 
acquisition 
of 
a 
European 
fund 
of 
funds 
—brought 
to 
him 
by 
Dunkerley 
—
and 
identified 
the 
source 
of 
funds 
for 
the 
acquisition 
as 
proceeds 
from 
a 
Tribal 
Bond 
issuance.
After 
describing 
the 
deal, 
Jason 
Galanis 
wrote: 
~"Hugh 
[Dunkerley] 
[has] 
locked 
it 
up 
and 
came
to 
me 
for 
the 
money, 
which 
i 
have 
agreed 
to 
arrange/provide 
(probably 
Indians)."
35. 
Each 
Tribal 
Bond 
issuance 
was 
governed 
by 
an 
indenture 
that 
provided 
for 
the
vast 
majority 
of 
proceeds 
to 
be 
invested 
in 
an 
annuity 
that 
was 
supposed 
to 
generate 
income
su€ficient 
to 
pay 
interest 
to 
the 
bond 
investors, 
plus 
a 
smaller 
annual 
sum 
to 
WLCC 
for 
use 
in
various 
development 
projects. 
The 
interest 
payments 
and 
ultimate 
repayment 
of 
the 
principal 
of
the 
bond 
issuance 
depended 
on 
the 
success 
of 
the 
investments 
held 
by 
the 
annuity 
in 
which 
the
proceeds 
of 
the 
issuances 
were 
to 
be 
invested.
13

36. 
In 
Tune 
2014, 
Burnham 
Securities' 
counsel 
provided 
WLCC 
with 
a 
summary 
of
the 
bond 
program 
that 
listed 
Wealth
-Assurance 
as 
the 
Annuity 
Issuer 
and 
PEM 
as 
the 
Portfolio
Manager.
37. 
In 
May 
2013, 
Jason 
Galanis 
had 
arranged 
Valor 
Group's 
purchase 
of 
Wealth
-
Assurance, 
purportedly 
aLiechtenstein-based 
life 
insurance 
and 
annuity 
provider 
with 
€1.5
billion 
in 
assets 
under 
management, 
and 
soon 
after 
installed 
Dunkerley 
on 
its 
Board 
of 
Directors.
Ultimately, 
Wealth
-Assurance 
never 
provided 
any 
annuity 
contracts 
in 
connection 
with 
any 
of
the 
bond 
issuances.
38. 
In 
August 
2014, 
when 
WLCC 
issued 
its 
first 
bonds, 
PEM 
nominally 
became 
the
independent 
investment 
manager 
for 
the 
bond 
proceeds. 
The 
trust 
indenture 
and 
a 
separate
investment 
management 
agreement 
with 
WLCC 
tasked 
PEM 
with 
selecting 
an 
annuity 
provider
and 
placing 
the 
bond 
proceeds 
in 
a 
variable 
annuity. 
Martin 
signed 
the 
investment 
management
agreement 
on 
behalf 
of 
PEM 
as 
its 
Managing 
Director.
39. 
However, 
Martin 
was 
not 
an 
independent 
investment 
manager 
but 
simply 
a 
shill
for 
Jason 
Galanis. 
In 
return 
fora 
$150,000 
fee 
(ultimately 
paid 
to 
him 
out 
of 
bond 
proceeds 
that
were 
supposed 
to 
be 
invested 
in 
the 
annuity), 
Martin 
agreed 
to 
act 
on 
behalf 
of 
PEM 
in 
signing
the 
Investment 
Management 
Agreement 
with 
WLCC 
with 
full 
knowledge 
that 
he 
would 
perform
none 
of 
the 
investment 
management 
duties 
set 
out 
in 
the 
contract.
40. 
Although 
the 
annuity 
contract 
named 
PEM 
as 
the 
independent 
manager 
of 
the
monies 
held 
by 
the 
annuity 
provider 
in 
a 
separately 
managed 
account, 
Martin 
exercised 
no
authority 
over 
any 
such 
account 
and 
made 
no 
investment 
decisions 
regarding 
the 
funds. 
In
signing 
the 
annuity 
contract 
with 
WAPCC, 
Martin 
knew, 
or 
was 
reckless 
in 
not 
knowing, 
that 
he
14

was 
funneling 
the 
bond 
proceeds 
directly 
to 
the 
control 
of 
Jason 
Galanis 
and 
his 
associates 
and
entities.
41. 
The 
annuity 
provider 
was 
not 
chosen 
by 
Martin, 
but 
by 
Jason 
Galanis. 
Instead 
of
selecting 
Wealth
-Assurance, 
Jason 
Galanis 
selected 
WAPCC. 
The 
annuity 
contract 
between
WLCC, 
WAPCC 
and 
PEM, 
by 
Martin, 
identifies 
WAPCC 
as 
a 
British 
Virgin 
Islands 
("BVI")-
incorporated 
entity 
that 
is 
"part 
of 
the 
Wealth
-Assurance 
Group 
of 
companies."
42. 
In 
fact, 
Dunkerley 
is 
the 
sole 
shareholder 
of 
WAPCC 
and 
it 
has 
no 
known
affiliation 
with 
Wealth
-Assurance. 
At 
Jason 
Galanis's 
instruction, 
ox 
with 
his 
knowledge,
Dunkerley 
incorporated 
WAPCC 
in 
the 
BVI 
on 
August 
22, 
2014, 
just 
four 
days 
before 
Jason
Galanis 
selected 
WAPCC 
as 
the 
annuity 
provider 
for 
the 
first 
issuance 
of 
the 
Tribal 
Bonds.
WAPCC's 
unaudited 
financial 
statements 
reflect 
that 
through 
the 
end 
of 
December 
2014, 
WLCC
was 
WAPCC's 
only 
annuity 
"counterparty."
43. 
Also 
contrary 
to 
the 
annuity 
contract 
between 
WAPCC, 
WLCC 
and 
PEM, 
the
bond 
proceeds 
were 
not 
directed 
to 
a 
WAPCC 
account 
at 
a 
bank 
"without 
any 
offices 
and/or
branches 
in 
the 
United 
States." 
Instead, 
the 
indenture 
trustee 
was 
instructed 
to 
send 
the 
bond
proceeds 
to 
a 
bank 
account 
at 
a 
Florida 
branch 
of 
a 
US 
bank, 
in 
the 
name 
of 
an 
identically 
named
company 
that 
had 
been 
incorporated 
in 
Florida 
on 
July 
7, 
2014.
44. 
In 
its 
Florida 
incorporation 
papers, 
WAPCC 
listed 
Dunkerley 
as 
its 
sole 
officer,
and 
gave 
its 
mailing 
address 
as 
a 
post 
office 
box 
in 
Florida 
used 
by 
Hirst. 
As 
described 
below,
the 
misappropriation 
of 
the 
bond 
proceeds 
all 
flowed 
from 
the 
WAPCC 
Account 
associated 
with
WAPCC 
in 
Florida.
15

C. 
Jason 
Galanis 
Secures 
Victims 
to 
Purchase 
the 
Tribal 
Bonds 
by 
Obtaining 
Control
over 
Hughes 
and 
AAM.
45. 
In 
order 
to 
secure 
victims 
to 
purchase 
the 
Tribal 
Bonds, 
Jason 
Galanis 
aid 
his
associates 
arranged 
to 
obtain 
control 
over 
two 
investment 
advisers, 
thereby 
gaining 
access 
to
captive 
client 
funds. 
First, 
in 
August 
2014, 
Jason 
Galanis, 
Archer, 
Cooney 
and 
Dunkerley
obtained 
control 
over 
Hughes, 
and 
Jason 
Galanis, 
Morton 
and 
Hirst 
arranged 
for 
Hughes 
to
invest 
$27 
million 
of 
its 
clients' 
funds 
in 
Tribal 
Bonds. 
Second, 
in 
Apri12015, 
Jason 
Galanis,
Archer, 
Cooney 
and 
Dunkerley 
obtained 
control 
over 
AAM, 
and 
Jason 
Galanis 
and 
Morton
arranged 
for 
AAM 
to 
invest 
$16.2 
million 
of 
its 
clients' 
funds 
in 
Tribal 
Bonds.
1. 
Hughes
46. 
In 
May 
2014, 
Jason 
Galanis 
was 
introduced 
to 
Morton, 
the 
half
-owner 
of 
GMT,
which 
had 
the 
stated 
business 
purpose 
of 
providing 
socially 
responsible 
fixed 
income 
investment
management 
and 
advisory 
services 
as 
a 
minority 
business 
enterprise. 
Together, 
Jason 
Galanis
and 
Morton 
began 
negotiating 
to 
purchase 
Hughes, 
an 
investment 
adviser 
with 
approximately
$900 
million 
under 
management, 
based 
in 
Alexandria, 
Virginia.
47. 
On 
June 
3, 
2014, 
Jason 
Galanis 
provided 
Morton 
with 
a 
document 
to 
provide 
to
Hughes' 
then
-owner 
to 
"demonstrate 
who 
[Morton's] 
financial 
sponsors 
are." 
The 
document
described 
a 
private 
equity 
control 
investor 
that 
owned 
several 
businesses, 
including 
Wealth
-
Assurance 
and 
Burnham 
Securities. 
On 
June 
5, 
2014, 
Jason 
Galanis 
sent 
Morton 
a 
term 
sheet
outlining 
the 
terms 
by 
which 
CORFA 
—  
a 
corporation 
owned 
in 
part 
by 
Jason 
Galanis, 
Archer
and 
Cooney 
—would 
directly 
or 
indirectly 
(through 
a 
subsidiary) 
finance 
GMT's 
purchase 
of
Hughes. 
Archer 
and 
Cooney 
knew 
that 
their 
agreement 
to 
finance 
the 
Hughes' 
acquisition 
with
CORFA 
funds 
was 
a 
necessary 
part 
of 
the 
plan 
to 
place 
the 
Tribal 
Bonds 
and 
obtain 
"liquidity"
for 
themselves 
and 
their 
corporate 
expansion 
projects.
16

48. 
Jason 
Galanis 
kept 
Archer 
and 
Cooney 
in 
the 
loop 
regarding 
the 
negotiations 
to
acquire 
Hughes. 
On 
July 
16, 
2014, 
he 
sent 
them 
a 
copy 
of 
the 
executed 
term 
sheet 
for 
the
acquisition 
of 
Hughes. 
He 
proclaimed: 
"I 
believe 
they 
will 
take 
$28 
million 
of 
the 
[Tribal]
issue." 
Cooney 
and 
Archer 
expressed 
their 
enthusiasm, 
with 
Cooney 
replying: 
"West 
Coast
Offense 
charging 
down 
the 
field!" 
Archer 
added: 
"This 
is 
very 
encouraging!"
49. 
On 
August 
1, 
2014, 
Jason 
Galanis 
sent 
Morton 
a 
text 
message 
stating 
that 
he
would 
form 
BFG 
Investments 
—the 
entity 
through 
which 
the 
contribution 
to 
the 
acquisition
would 
be 
made 
—the 
next 
day. 
On 
August 
5, 
2014, 
at 
the 
direction 
of 
Jason 
Galanis, 
Dunkerley
formed 
BFG 
Investments 
and 
became 
its 
managing 
member.
50. 
One 
week 
later, 
GMT 
entered 
into 
an 
amended 
and 
restated 
operating 
agreement
with 
its 
members, 
pursuant 
to 
which 
BFG 
Investments 
became 
a 
"Preferred 
Member." 
The
agreement 
was 
signed 
by 
Dunkerley 
on 
behalf 
of 
BFG 
Investments, 
and 
stated 
that 
notices 
to
BFG 
Investments 
were 
to 
be 
sent 
to 
Archer. 
After 
the 
merger 
closed, 
Hughes 
became 
GMT's
subsidiary 
and 
Morton 
and 
her 
business 
partner 
became 
officers 
of 
Hughes.
51. 
On 
August 
12, 
2014, 
Jason 
Galanis 
arranged 
for 
Wealth
-Assurance 
to 
fund 
BFG
Investments' 
initial 
capital 
contribution 
of 
$2,660,618 
to 
GMT, 
which 
GMT 
used 
to 
finance 
its
purchase 
of 
Hughes.
52. 
As 
Morton 
knew, 
Jason 
Galanis, 
Archer, 
Cooney 
and 
Dunkerley's 
agreement 
to
finance 
the 
acquisition 
of 
Hughes 
was 
contingent 
on 
her 
agreement 
to 
invest 
Hughes' 
client
funds 
in 
Tribal 
Bonds. 
In 
July 
2014, 
even 
be€ore 
the 
purchase 
of 
Hughes 
had 
been 
completed,
Morton 
e
-mailed 
Jason 
Galanis 
"an 
update 
on 
how 
we 
will 
place 
the 
bonds 
in 
a 
portfolio" 
and
promised 
him 
via 
text 
message, 
"I 
will 
make 
sure 
you 
make 
a 
TON 
of 
money 
and 
smile 
all 
the
way 
to 
the 
bank." 
On 
August 
12, 
2014, 
Morton 
sent 
Jason 
Galanis 
a 
text 
message 
noting, 
"You
17

invested 
because 
of 
the 
bonds 
not 
me," 
to 
which 
he 
responded: 
"The 
bonds 
are 
only 
possible
because 
of 
you 
my 
dear."
53. 
Pursuant 
to 
GMT's 
amended 
operating 
agreement, 
BFG 
Investments 
was
accorded 
certain 
privileges, 
including 
the 
right 
to 
approve 
the 
CIO 
for 
GMT 
and 
Hughes, 
and 
to
appoint 
members 
to 
Hughes' 
board.
54. 
Before 
GMT 
completed 
its 
purchase 
of 
Hughes, 
Jason 
Galanis 
introduced 
Morton
to 
Hirst 
as 
a 
potential 
CIO. 
On 
August 
12, 
2014, 
Hirst 
sent 
Morton 
a 
draft 
employment 
contract.
Hirst 
and 
Morton 
executed 
the 
contract 
and 
related 
paperwork 
that 
same 
day.
55. 
However, 
a 
few 
days 
later, 
Hirst 
informed 
Morton 
that 
he 
did 
not 
want 
Hughes 
to
disclose 
his 
name 
in 
its 
Form 
ADV, 
a 
form 
that 
investment 
advisers 
registered 
with 
the
Commission 
are 
required 
to 
file 
upon 
registration 
and 
annually 
thereafter. 
For 
that 
reason, 
Hirst
decided 
to 
resign 
as 
Hughes' 
CIO 
and 
agreed 
to 
act 
as 
a 
paid 
independent 
investment 
consultant
instead, 
a 
position 
that 
he 
understood 
would 
not 
require 
disclosure 
on 
Hughes' 
Form 
ADV. 
As
Morton 
told 
Jason 
Galanis, 
"In 
regard 
to 
Hirst, 
he 
opted 
to 
be 
a 
consultant 
because 
as 
an
employee 
he 
would 
have 
been 
required 
to 
make 
certain 
disclosures 
for 
our 
AllV... 
If 
we 
want
to 
follow 
the 
contract 
which 
has 
him 
as 
CIO 
its 
[sic] 
no 
problem, 
we 
just 
have 
to 
change 
the 
title,
but 
he 
has 
to 
make 
the 
disclosures 
per 
regulations."
56. 
By 
August 
14, 
2014, 
just 
two 
days 
after 
the 
purchase 
of 
Hughes 
was 
completed,
Jason 
Galanis 
and 
Hirst 
worked 
to 
invest 
Hughes 
client 
funds 
in 
the 
Tribal 
Bonds. 
Hirst 
quickly
undertook 
an 
analysis 
of 
Hughes' 
clients' 
accounts 
and 
investments 
to 
determine 
what 
could 
be
liquidated 
to 
generate 
fiends 
to 
purchase 
Tribal 
Bonds.
57. 
Morton 
asked 
Hughes' 
compliance 
officer 
to 
conduct 
an 
analysis 
of 
the
investment 
guidelines 
of 
seven 
of 
Hughes' 
clients 
to 
determine 
whether 
they 
allowed 
for
18

purchase of the Tribal Bonds. The compliance officer concluded that most of the clients'
guidelines prohibited privately-placed, unrated bonds like the Tribal Bonds, and that in no case
could 
the investment be made without consulting the client first.
58. 
On August 17, 2014, Jason 
Galanis, 
using aBurnham-affiliated e-mail address
(burnhamequitypartners.com), 
e
-mailed Morton a copy of 
the 
draft 
trust indenture 
for 
the 
Tribal
Bonds. It provided 
that the bond 
proceeds 
would be invested in an annuity that would be issued
and managed by Wealth
-Assurance. 
In addition, 
pursuant 
to a 
Placement Agency 
Agreement for
the 
Tribal 
Bonds, 
Burnham Securities was 
entitled 
to a $250,000 fee from the bond sale
proceeds. The 
agreement stated 
that notices to 
Burnham 
Securities 
should be 
sent to Jason
Galanis (spelled 
"Galanos" in the agreement) and was signed by Dunkerley. Morton knew that
Burnham Securities would 
be 
acting as 
the 
Placement Agent 
for the Tribal 
Bonds.
59. 
On 
August 
17, 
2014, Morton 
e
-mailed Jason Galanis, acknowledging 
the conflicts
of interest presented by her investment of client funds in a transaction in which affiliated
companies 
—Wealth-Assurance and Burnham Securities —stood to benefit. She complained that
she was spending much time performing due diligence regarding the Tribal Bonds "because of
the multiple views I had to take." She explained: 
"For instance, since many of 
the accounts are
ERISA funds, I had to consider 
those 
guidelines and regulations, I 
have 
a fiduciary duty to
Burnham, and a fiduciary 
duty 
to 
the 
clients."
60. In another e-mail 
dated 
August 17, 2014, 
Morton sent Jason 
Galanis a memo
articulating 
concerns 
regarding the Tribal Bonds. Among other things, 
Morton's memo
questioned whether the tribe affiliated with the issuer—a tribal corporation operating in an
impoverished region—would be legally 
or 
financially 
accountable for 
the Tribal 
Bonds 
and
whether institutional clients would fire Hughes if they were dissatisfied with the investment.
19

61. In her e-mail transmitting the memo to Jason Galanis, Morton 
wrote, in reference
to 
BFG 
Investments' 
investment in 
Hughes: "The decision regarding what s~iould be 
done 
is
yours, not 
mine... To 
be fair 
to both of 
us, 
if 
you 
made the investment 
with this in mind, I do
not have the moral right to stand in the way and everything is in place 
to move 
forward...."
She reiterated in a text message 
to 
Jason 
Galanis: "Let's 
be 
clear, if you want the bonds 
to 
go in,
I have no say. I am not sitting in the position of making a 
judgement 
[sic]. 
If you 
invested in
Hughes for this sole purpose than it 
is 
your 
call not mine... If you're thinking that I can or would
stop this then I have totally screwed up my communication." Jason 
Galanis 
told 
Morton to let
Hirst 
"rake 
the decision."
62. 
Between August 22 and 26, 2014, Hirst signed 
trade tickets 
purchasing
$27,077,436 
of Tribal 
Bonds 
on behalf 
of 
nine 
of Hughes' clients. The funds were 
sent 
to a trust
account at US Bank for the benefit of 
WLCC. 
Neither 
Morton nor Hirst 
informed any of those
clients about 
the 
investments beforehand. As one of the costs of issuance 
associated 
with 
the
bonds, WLCC paid Burnham 
Securities a $250,000 placement agent fee 
out of the bond
proceeds, of 
which 
$125,000 was then paid to Dunkerley as his share of the fee.
63. Morton and Hirst knew that 
Morton's "financial 
sponsors," including Jason
Galanis 
and Dunkerley, were 
associated with Wealth-Assurance and Burnham 
Securities, which
had been described to her as the annuity provider and 
placement agent, 
respectively—entities
that 
would 
financially 
benefit from 
Hughes' clients' purchases of the Tribal Bonds.
Nevertheless, neither she nor Hirst disclosed to Hughes' 
clients that 
Hughes was investing their
funds 
in investments 
that 
would 
financially benefit its undisclosed part owners and 
financiers.
64. Upon learning of the 
investments 
in 
the 
bonds, 
several 
Hughes clients expressed
concerns regarding the bonds' valuation and suitability and 
demanded that the 
investments 
be
20

unwound. Morton 
assured them that Burril~am 
Securities, as the placement agent, had other
clients interested in the bonds 
and was in the process of arranging 
purchases. However, despite
repeated promises, Burnham Securities never produced 
buyers 
for the bonds, 
and none 
of
Hughes' clients 
was 
able 
to 
liquidate 
its position in the bonds.
2. 
AAM
65. 
In the fall of 2014, Jason Galanis began searching for additional 
investors to
purchase another tranche of Tribal 
Bonds. 
Morton 
identified AAM, an investment manager with
$11 
billion in 
assets under management, as a potential target for Hughes.
66. During the course 
of Morton's 
negotiations to 
acquire 
AAM, on October 30,
2014, Morton e-mailed 
Jason Galanis that she had had a conversation with 
AAM's Chief
Strategist "about our SRI [Socially 
Responsible Investing]/Native 
American Initiative" and that
"he 
is so on board with this." According to Morton, AAM's Chief 
Strategist told her 
that 
if she
made him aware of the 
details of the 
bonds ahead of time, 
he 
would do his "damndest to get it
placed within a day after the acquisition." Jason 
Galanis forwarded the e-mail 
to 
Cooney and
Archer, with 
the note "working on more 
liquidity and sources for the various projects...see
below. 
Promising." Cooney replied: "Very promising Greco! !"
67. With 
the 
backing 
of Jason 
Galanis, Archer, Cooney 
and 
Dunkerley, Morton
continued 
to negotiate with AAM. On December 1, 2014, at Jason 
Galanis's direction or with
his knowledge, Dunkerley 
provided 
AAM's 
General Counsel a letter 
on behalf of the "Cor
Group 
of 
Companies, 
Inc.," 
a CORFA affiliate, confirming its agreement to 
provide financing 
to
capitalize the purchase of AAM. On 
February 2, 2015, Jason 
Galanis 
sent 
Archer and Cooney a
"consultant 
report" directed to the "Board of 
Valorlife" 
regarding the 
financing of the proposed
acquisition 
of 
AAM. Valorlife was a foreign insurer that Valor Group had 
acquired in
November 2014.
21

68. On Apri12, 2015, at the direction of Jason Galanis, 
Valorlife financed the
purchase of AAM through BFG 
Investments 
with an upfront capital contribution of 
$6,120,398.
In addition to the upfront capital contribution, the purchase of AAM also included an agreement
to make a deferred payment of 
$4,854,420, 
payable pursuant to two Reset 
Notes. 
The deferred
payment was guaranteed by Valor Group and the guaranty was signed by Dunkerley 
as 
Valor
Group's President.
69. On March 30, 2015, Jason Galanis forwarded copies of the executed AAM
acquisition 
documents to Cooney, Archer and Burnham Financial 
Group's President, and
Cooney replied: "18 Balloons! ! !  Fantastic J! ! !" The terms of the purchase were memorialized
in an 
Amended and Restated Liability Company Agreement for GMT ("Restated 
Agreement"),
entered into as of Apri12, 2015. Dunkerley signed the agreement on behalf of BFG 
Investments
as its Managing 
Member.
70. Pursuant to the Restated Agreement, AAM became GMT's wholly 
owned
subsidiary. The Restated 
Agreement 
provided that 
AAM's Board of Managers was to consist of
four persons, comprised of two Class A Holders (Morton and her business partner) 
and two
persons 
selected by 
BFG Investments as the Class 
B 
Holder. Together, the Board of Managers
was granted the exclusive right to control AAM. In addition, GMT was required 
to appoint a
CIO that was 
acceptable 
to 
BFG Investments.
71. Immediately after the acquisition of AAM was completed, and in 
furtherance 
of
his 
pledge 
to 
Archer and 
Cooney to obtain more "liquidity" for their 
"various projects," Jason
Galanis instructed Morton to identify investors to purchase additional Tribal 
Bonds. By 
that
point, Morton 
was 
aware that there 
was no 
active market for the 
bonds. Since at least November
2014, 
she had 
been dealing 
with client complaints, 
including 
threatened litigation, 
regarding 
the
22

original 
bond 
investments 
by 
Hughes' 
clients 
and 
had 
been 
unsuccessful 
in 
her 
efforts 
to 
arrange
for 
Burnham 
Securities 
to 
find 
buyers 
or 
purchase 
them 
itself. 
Indeed, 
in 
January 
2015, 
she 
e
-
mailed 
Jason 
Galanis: 
"I 
thought 
that 
if 
necessary 
B[urn~iam] 
would 
bid 
on 
the 
bonds 
if 
the
clients. 
wished. 
It 
appears 
not 
to 
be 
the 
case. 
We 
have 
received 
one 
formal 
communication 
and 
I
expect 
we 
will 
receive 
others 
in 
the 
coming 
days."
72. 
As 
before, 
Morton 
learned 
that 
entities 
affiliated 
with 
her 
"financial 
sponsors,"
including 
Jason 
Galanis, 
Archer, 
Cooney 
and 
DunkerYey, 
would 
financially 
benefit 
from 
the 
sale
of 
this 
tranche 
of 
Tribal 
Bonds. 
On 
Apri19, 
2015, 
Burnham 
Securities' 
counsel 
sent 
Morton 
a
private 
placerrient 
memorandum 
for 
the 
new 
issuance 
of 
Tribal 
Bonds. 
Like 
the 
August 
2014
Tribal 
Bonds 
issuance, 
it 
provided 
that 
the 
proceeds 
of 
the 
new 
issuance 
would 
be 
used 
for
transaction 
costs, 
including 
a 
placement 
agent 
fee, 
and 
to 
purchase 
an 
annuity. 
It 
identified
"Wealth 
Assurance 
Private 
Client 
Corporation, 
a 
subsidiary 
of 
Valor 
Group" 
as 
the 
underwriter
and 
issuer 
of 
the 
annuity 
contract. 
It 
also 
disclosed 
that 
pursuant 
to 
a 
placement 
agreement
entered 
into 
between 
the 
issuer, 
WLCC, 
and 
Burnham 
Securities, 
"Burnham 
Securities 
will
receive 
an 
$80,040 
fee 
from 
the 
Issuer 
for 
the 
sale 
of 
the 
Bonds 
by 
the 
Issuer."
73. 
On 
April 
10, 
2015, 
Jason 
Galanis 
sent 
Morton 
a 
"Class 
A 
board 
member
communication 
request," 
irr 
which 
he 
demanded 
a 
conference 
call 
to 
discuss 
a 
number 
of
business 
related 
items. 
In 
the 
e-mail, 
Jason 
Galanis 
expressed 
frustration 
regarding 
AAM's 
lack
of 
support 
for 
a 
potential 
investment 
in 
additional 
Tribal 
Bonds: 
"On 
the 
Native 
American
initiative, 
this 
was 
and 
has 
been 
a 
fundamental 
part 
of 
the 
business 
plan 
since 
we 
met... 
"and
"[i]t 
is 
in 
everyone's 
interest 
to 
maintain 
their 
word." 
In 
the 
e-mail, 
Jason 
Galanis 
stated: 
"I 
am
not 
a 
member 
of 
the 
board. 
However, 
I 
was 
responsible 
for 
arranging 
the 
financing 
for 
the
company 
and 
have 
been 
requested 
to 
continue 
to 
be 
the 
lead 
in 
liaising 
with 
tie 
investors."
23

74. 
On 
April 
14, 
2015, 
Morton 
e
-mailed 
Jason 
Galanis 
explaining 
that 
they 
"had 
a
challenge 
regarding 
bond 
placement," 
and 
proposing 
that 
they 
could 
"mitigate 
the 
challenge 
o~
restrictive 
investment 
policies 
by 
going 
directly 
to 
our 
client 
base 
(which 
numbers 
over 
40
clients) 
and 
introduce 
the 
concept. 
Exceptions 
to 
investment 
policies 
occur 
all 
of 
the 
time, 
the
key 
is 
to 
have 
the 
relationship 
necessary 
and 
begin 
the 
discussions 
in 
advance 
of 
the 
placement."
In 
the 
same 
e-mail, 
Morton 
also 
requested 
a 
$500,000 
loan, 
explaining 
that 
AAM 
was 
suffering
from 
financial 
difficulty 
and 
was 
struggling 
to 
pay 
its 
operating 
costs. 
Jason 
Galanis 
replied 
to
Morton's 
message, 
"Let's 
talk, 
I 
don't 
like 
e-mail."
75. 
The 
next 
day, 
Morton 
texted 
Jason 
Galanis: 
"I 
would 
really 
like 
to 
have 
clarity 
on
the 
working 
capital 
as 
soon 
as 
possible. 
The 
trade 
will 
go 
through 
in 
the 
am." 
Jason 
Galanis
replied: 
"Will 
wire 
305 
on 
Friday. 
Worst 
Monday." 
On 
April 
16, 
2015, 
Morton 
directed 
the
investment 
of 
$16.2 
million 
of 
an 
AAM 
client's 
funds 
in 
the 
new 
issuance 
of 
Tribal 
Bonds. 
One
week 
later, 
AAM 
received 
a 
$305,000 
payment, 
funded 
by 
bond 
proceeds 
from 
the 
WAPCC
Account 
in 
Florida 
and 
authorized 
by 
Dunkerley 
at 
Jason 
Galanis's 
direction 
or 
with 
his
knowledge.
76. 
Morton 
arranged 
for 
AAM 
to 
use 
funds 
maintained 
in 
one 
of 
its 
managed 
fiends
(the 
"HY 
Fund") 
for 
the 
bond 
purchase. 
HY 
Fund 
implements 
a 
strategy 
of 
making 
diverse, 
high
yielding, 
liquid 
investments 
through 
designated 
investment 
managers. 
HY 
Fund's 
only 
investor
was 
Pension 
Fund 
1, 
an 
existing 
client 
of 
AAM's 
for 
which 
AAM 
managed 
other 
investments 
in
addition 
to 
its 
investment 
in 
the 
HY 
Fund.
77. 
The 
purchase 
of 
the 
Tribal 
Bonds 
was 
inconsistent 
with 
HY 
Fund's 
investment
strategy, 
and 
notwithstanding 
her 
previous 
e-mail 
to 
Jason 
Galanis 
suggesting 
that 
AAM
~~

"introduce 
the 
concept" 
to 
Pension 
Fund 
1 
prior 
to 
making 
the 
investment, 
Morton 
did 
not
discuss 
the 
purchase 
of 
the 
bonds 
with 
Pension 
Fund 
1 
prior 
to 
making 
the 
investment.
78. 
After 
the 
purchase, 
on 
Apri123, 
2015, 
Morton 
informed 
Pension 
Fund 
1 
about 
the
investment 
in 
the 
bonds 
and 
the 
fact 
that 
there 
was 
a 
potential 
conflict 
of 
interest 
because 
the
individuals 
who 
controlled 
the 
annuity 
provider 
and 
the 
placement 
agent 
were 
also 
AAM's
financiers. 
Morton 
did 
nat 
tell 
Pension 
Fund 
1 
that 
those 
same 
individuals 
were 
also 
AE1M's
part-owners, 
and 
the 
largest 
source 
of 
AAM's 
capital. 
Nor 
did 
Morton 
disclose 
that 
Jason
Galanis 
had 
promised 
her 
additional 
funding 
for 
AAM 
in 
connection 
with 
her 
approval 
of 
the
bond 
purchase.
79. 
The 
next 
day, 
Pension 
Fund 
1's 
Executive 
Director 
informed 
AAM 
that 
it
"strongly 
disagree[d]" 
with 
the 
purchase 
of 
the 
bonds 
and 
that 
Pension 
Fund 
1 
"should 
have 
been
provided 
advance 
notice 
of 
this 
questionable 
purchase, 
particularly 
due 
to 
the 
fact 
that 
a 
conflict
of 
interest 
exists 
in 
the 
purchase." 
Pension 
Fund 
1 
demanded 
that 
the 
bonds 
be 
liquidated
immediately.
80. 
Once 
again, 
Burnham 
Securities 
promised 
to 
find 
a 
purchaser 
for 
the 
bonds.
However, 
neither 
Burnham 
Securities 
nor 
AAM 
was 
able 
to 
find 
any 
purchaser 
for 
the 
Tribal
Bonds.
81. 
Pension 
Fund 
1 
sent 
AAM 
a 
notice 
of 
redemption 
of 
all 
of 
its 
funds 
in 
HY 
Fund
on 
September 
24, 
2015 
and, 
on 
October 
29, 
2015, 
it 
notified 
AAM 
that 
it 
was 
redeeming 
the 
rest
of 
its 
funds 
under 
AAM's 
management. 
Pension 
Fund 
1 
explained 
that 
its 
decision 
to 
end 
its
relationship 
with 
AAM 
was 
based 
on 
Morton's 
"unilateral 
actions 
(which 
[were 
not 
yet]
reversed) 
to 
violate 
investment 
guidelines 
and 
purchase 
inappropriate 
securities 
with 
the 
money
contributed 
by 
the 
hard 
working 
members 
of 
[Pension 
Fund 
1]."
25

82. 
In 
October 
2015, 
Dunkerley, 
on 
behalf 
of 
Burnham 
Securities, 
e
-mailed 
AAM
acknowledging 
the 
lack 
of 
a 
market 
for 
the 
bonds, 
and 
admitted 
that 
they 
could 
not 
even 
be
priced: 
"You 
may 
want 
to 
refer 
to 
the 
risks 
section 
of 
the. 
PPM 
where 
it 
clearly 
says 
there 
is 
`no
market 
for 
these 
and 
none 
is 
expected 
to 
develop 
in 
the 
future' 
.... 
This 
situation 
is 
clearly 
true
at 
the 
moment 
and 
given 
the 
current 
investigation 
any 
price 
attributed 
to 
these 
bonds 
may 
not 
be
appropriate 
for 
accounting 
or 
even 
misleading 
for 
any 
other 
purposes."
83. 
At 
the 
time, 
Dunkerley 
knew 
that, 
contrary 
to 
the 
annuity 
contract 
he 
had 
signed,
none 
of 
the 
bond 
proceeds 
had 
been 
sent 
to 
a 
separate 
account 
held 
by 
WAPCC 
BVI 
and
managed 
by 
PEM, 
but, 
in 
accordance 
with 
the 
scheme, 
had 
instead 
been 
sent 
to 
the 
separately
incorporated 
WAPCC 
in 
Florida 
and 
misappropriated 
from 
there.
D. 
Jason 
Galanis, 
John 
Galanis, 
Dunkerley, 
Hirst, 
Archer 
and 
Cooney 
Misappropriate
the 
Tribal 
Bond 
Proceeds.
84. 
Based 
on 
the 
documents 
governing 
the 
sate 
of 
the 
$43.2 
million 
in 
Tribal 
Bonds
to 
Hughes 
and 
AAM 
clients, 
and 
after 
the 
deduction 
of 
various 
issuance 
costs 
and 
up
-front
payments 
to 
WLCC, 
$40.1 
million 
of 
the 
bond 
proceeds 
were 
to 
be 
invested 
by 
PEM 
in 
annuities
issued 
by 
WAPCC 
in 
BVI. 
The 
bonds 
issued 
to 
Hughes 
investors 
were 
to 
pay 
5.62% 
interest
annually 
and 
mature 
in 
10 
years; 
the 
bonds 
issued 
to 
AAM's 
HY 
Fund 
were 
to 
pay 
6.02%
interest 
annually 
and 
mature 
in 
7 
years. 
The 
payment 
of 
the 
interest 
and 
return 
of 
the 
full 
$43.2
million 
in 
principal 
upon 
maturity 
of 
all 
the 
bonds 
was 
dependent 
on 
the 
successful 
investment
of 
the 
proceeds 
by 
WAPCC, 
under 
the 
direction 
of 
PEM.
85. 
As 
set 
out 
in 
the 
two 
separate 
annuity 
contracts 
governing 
the 
bond 
issuances 
to
Hughes 
and 
AAM 
clients 
(both 
signed 
by 
Dunkerley 
on 
WAPCC's 
behalf 
and 
Martin 
on 
PEM's
behalf 
, 
WAYCC 
promised 
that 
the 
initial 
proceeds 
received 
would 
be 
kept 
in 
a 
"segregated 
asset
account" 
that 
would 
be 
"unique 
to 
this 
Contract" 
and 
would 
be 
"segregated 
from 
the 
Company's
26

other 
assets." 
The 
annuity 
contract 
governing 
the 
I-Iughes 
clients' 
bond 
proceeds 
also 
explicitly
provided 
that 
the 
annuity 
purchase 
payment 
was 
to 
be 
made 
by 
wire 
transfer 
to 
"a 
bank 
without
any 
offices 
and/or 
branches 
in 
the 
United 
States" 
(a 
provision 
that 
was 
apparently 
edited 
out 
of
the 
subsequent 
amluity 
contract 
used 
for 
the 
bond 
issuance 
sold 
to 
the 
HY 
Fund).
86. 
As 
described 
above, 
instead, 
all 
of 
the 
bond 
proceeds 
were 
sent 
to 
the 
WAPCC
Account 
in 
Florida, 
held 
in 
the 
name 
of 
an 
identically 
named 
entity 
(WAPCC) 
incorporated 
and
based 
in 
Florida 
rather 
than 
in 
the 
BVI, 
and 
were 
never 
managed 
by 
PEM 
or 
Martin, 
in 
a
separate 
account 
or 
otherwise.
87. 
In 
furtherance 
of 
the 
scheme, 
with 
Jason 
Galanis's 
knowledge, 
Dunkerley
misappropriated 
the 
Tribal 
Bond 
proceeds 
from 
the 
WAPCC 
Account 
by 
authorizing 
wires 
to 
a
number 
of 
other 
entities, 
at 
least 
on 
some 
occasions 
doing 
so 
based 
on 
written 
instructions 
he
received 
from 
Jason 
Galanis. 
For 
his 
part, 
Martin 
was 
compensated 
for 
his 
role 
in 
funneling 
the
proceeds 
to 
WAPCC 
through 
the 
annuity 
contract 
by 
payments 
from 
Galanis-controlled
accounts.
88. 
Dunkerley 
wired 
the 
largest 
portion 
of 
the 
proceeds 
to 
Thorsdale, 
an 
entity 
Jason
Galanis 
controlled, 
from 
which 
they 
were 
further 
misappropriated 
by 
Jason 
Galanis 
for 
his 
own
benefit 
and 
that 
of 
his 
associates. 
According 
to 
its 
operating 
agreement, 
Thorsdale 
was
incorporated 
in 
Nevada 
as 
a 
"Family 
Trust 
Company" 
for 
"members 
of 
the 
Berger 
family 
and 
its
Family 
Affiliates." 
Berger 
is 
the 
maiden 
name 
of 
Jason 
Galanis's 
wife. 
Jason 
Galanis 
had
signing 
authority 
over 
Thorsdale's 
bank 
account, 
held 
its 
only 
debit 
card, 
and 
directed 
all 
the
wires 
that 
Thorsdale 
sent 
that 
were 
funded 
by 
bond 
proceeds 
from 
the 
WAPCC 
Account.
89. 
The 
misappropriation 
of 
Tribat 
Bond 
proceeds 
by 
WAPCC 
and 
Thorsdale
included 
the 
following:
27

1. 
Payments 
to 
Hughes 
and 
AAM
90. 
Morton's 
decisions 
to 
invest 
Hughes' 
and 
AAM's 
clients' 
funds 
in 
the 
Tribal
Bonds 
were 
driven 
in 
part 
by 
her 
expectation 
that 
Jason 
Galanis 
would 
continue 
to 
arrange
financial 
backing 
for 
the 
firms. 
Not 
only 
were 
her 
expectations 
met, 
but 
they 
were 
met 
by
Hughes' 
and 
AAM's 
receipt 
of 
a 
portion 
of 
the 
very 
proceeds 
that 
WAPCC 
was 
supposed 
to 
be
investing 
on 
behalf 
of 
the 
bond 
issuer 
and 
for 
the 
ultimate 
benefit 
of 
Morton's 
clients.
91. 
At 
the 
direction 
of 
Jason 
Galanis, 
Hughes 
and 
AAM 
received 
at 
least 
$655,000 
of
Tribal 
Bond 
proceeds: 
1) 
a 
$350,000 
payment 
on 
September 
8, 
2014, 
that 
Jason 
Galanis 
had
Dunkerley 
wire 
from 
WAPCC 
to 
Thorsdale 
and 
then 
to 
Valor 
Group, 
which 
then 
wired 
it 
to
Hughes; 
and 
2) 
a 
$305,000 
payment 
(matching 
the 
amount 
that 
Jason 
Galanis 
had 
expressly
promised 
to 
Morton 
the 
day 
before 
she 
effected 
the 
Apri12015 
bond 
purchase 
by 
the 
HY 
Fund)
that 
Dunkerley 
wired 
to 
AAM 
directly 
from 
the 
WAPCC 
Account 
on 
Apri123, 
2015.
2. 
$2,350,000 
to 
John 
Galanis
92. 
1'he 
closing 
documents 
for 
the 
sale 
of 
the 
first 
issuance 
of 
Tribal 
Bonds 
in 
August
2014 
did 
not 
reflect 
any 
payments 
to 
John 
Galanis 
for 
the 
work 
he 
did 
in 
presenting 
the
transaction 
to 
WLCC 
and 
securing 
its 
participation 
as 
issuer. 
Nor 
was 
WLCC 
informed 
by 
John
Galanis, 
or 
anyone 
else, 
that 
John 
Galanis 
would 
earn 
any 
fees 
in 
connection 
with 
the 
Tribal
Bonds, 
although 
John 
Galanis 
knew 
that 
proceeds 
from 
the 
issuance 
would 
be 
directed 
to 
him 
by
his 
son.
93. 
Yet, 
after 
WAPCC 
received 
the 
bond 
proceeds 
in 
August 
2014, 
all 
of 
which 
it 
had
received 
as 
purchase 
money 
for 
the 
bogus 
annuity 
contract 
it 
signed, 
at 
Jason 
Galanis's 
direction,
Dunkerley 
sent 
$2.35 
million 
from 
WAPCC 
to 
an 
entity 
controlled 
by 
John 
Galanis 
called
28

Sovereign 
Nations 
Development 
Corp. 
From 
Sovereign 
Nations 
Development 
Corp's 
bank
account, 
John 
Galanis 
directed 
several 
further 
distributions 
to 
another 
account 
in 
his 
name.
3. 
Jason 
Galanis 
and 
Dunkerley 
Misappropriate 
Millions 
to 
Benefit
Jason 
Galanis, 
Dunkerley, 
Hirst, 
Cooney, 
Archer 
and 
Martin.
94. 
Jason 
Galanis 
arranged 
to 
have 
WAPCC 
and 
Thorsdale 
transfer 
over 
$3 
million 
to
lenders 
and 
others 
for 
the 
mortgage 
on 
and 
maintenance 
of 
his 
estate 
in 
Los 
Angeles, 
California.
He 
also 
arranged 
to 
have 
money 
wired 
from 
WAPCC 
and 
Thorsdale 
to 
his 
criminal 
defense
attorneys 
($497,210) 
and 
to 
his 
mother, 
wife 
and 
father-in-law 
(totaling 
$214,000).
95. 
In 
addition, 
Jason 
Galanis 
used 
his 
Thorsdale 
debit 
card 
to 
spend 
thousands 
more
at 
restaurants 
and 
luxury 
retailers 
such 
as 
Valentino, 
Yves 
Saint 
Laurent, 
Barneys, 
Prada 
and
Gucci.
96. 
Dunkerley, 
Hirst, 
Cooney, 
Archer 
and 
Martin 
all 
benefited 
from 
their
participation 
in 
the 
scheme 
as 
well 
through 
transfers 
directed 
by 
Jason 
Galanis 
out 
of 
the
Thorsdale 
account 
that 
they 
received 
individually 
or 
through 
entities 
that 
they 
controlled,
including 
but 
not 
limited 
to: 
a) 
$700,513 
to 
Archer 
between 
November 
2014 
and 
Apri12015; 
b)
$4,370,000 
to 
Cooney 
between 
August 
2014 
and 
April 
2015; 
c) 
$20,485 
to 
Dunkerley 
in
September 
2014; 
d) 
$1,300,000 
to 
Hirst 
in 
August 
2014; 
and 
e) 
$165,000 
to 
Martin 
between
September 
2014 
and 
May 
2015.
4. 
Jason 
Galanis, 
Archer 
and 
Cooney 
Recycle 
Tribal 
Bond 
Proceeds 
to
Acquire 
New 
Tribal 
Bonds 
for 
Burnham's 
Use.
97. 
In 
August 
2014, 
the 
Independent 
Trustees 
of 
an 
asset 
manager 
affiliated 
with
Burnham 
Securities 
sought 
"iron
-clad 
assurance(s)" 
from 
Archer 
(representing 
CORFA 
and
BAM 
Holdings, 
LLC) 
that 
Jason 
Galanis 
would 
"not 
be 
involved 
with 
any 
of 
the 
Burnham
entities" 
or 
have 
an 
"interest 
of 
any 
kind, 
direct 
or 
indirect, 
in 
any 
of 
the 
Burnham 
entities 
or
►T~

their 
successors, 
that 
he 
will 
not 
source 
deals 
to 
the 
Burnham 
entities 
and 
that 
the 
Burnham
entities 
will 
not 
invest 
with 
or 
in, 
directly 
or• 
indirectly, 
any 
business 
or 
enterprise 
in 
which 
Mr.
Galanis 
has 
any 
association, 
affiliation 
or 
investment, 
pecuniary 
or 
otherwise, 
directly 
or
indirectly." 
Archer 
provided 
the 
requested 
assurances 
to 
the 
Independent 
Trustees 
via 
a 
letter
dated 
September 
26, 
2014, 
but 
nonetheless 
continued 
to 
significantly 
involve 
Jason 
Galanis 
in
Burnham's 
business 
activities, 
not 
only 
by 
allowing 
Jason 
Galanis 
to 
solicit 
Burnham 
Securities'
involvement 
as 
the 
private 
placement 
agent 
for 
the 
Tribal 
Bonds 
and 
underwriter 
for 
at 
least 
one
initial 
public 
offering, 
as 
described 
below, 
but 
also 
by 
accepting 
his 
direction 
and 
guidance 
on
how 
to 
use 
the 
Tribal 
Bonds 
to 
benefit 
Burnham 
Securities 
and 
its 
affiliates.
98. 
On 
October 
1, 
2014, 
Jason 
Galanis 
used 
$15 
million 
of 
the 
$27 
million 
that
Hughes' 
clients 
invested 
in 
the 
August 
2014 
issuance 
of 
the 
Tribal 
Bonds 
to 
fund 
the 
acquisition
of 
a 
new 
$15 
million 
issuance 
of 
Tribal 
Bonds 
by 
RSB, 
an 
entity 
wholly 
owned 
by 
Archer. 
In
other 
words, 
instead 
of 
having 
WAPCC 
invest 
the 
first 
bond 
issuance's 
proceeds 
in 
an 
annuity
and 
assure 
repayment 
of 
the 
bonds' 
principal 
and 
interest, 
Jason 
Galanis 
used 
$15 
million 
of
those 
proceeds 
to 
invest 
in 
more 
Tribal 
Bonds, 
causing 
WLCC 
to 
issue 
$15 
million 
more 
in
obligations 
even 
though 
it 
was 
not, 
in 
actuality, 
receiving 
any 
additional 
proceeds 
to 
fund 
an
annuity 
that 
would 
be 
the 
only 
source 
for 
repayment 
of 
the 
bonds. 
The 
point 
of 
this 
recycling
scheme 
was 
to 
allow 
Jason 
Galanis 
to 
use 
the 
bonds 
as 
currency 
in 
various 
transactions,
including 
to 
bolster 
Burnham 
Securities' 
net 
capital.
99. 
To 
coordinate 
Archer's 
purchase 
of 
the 
$15 
million 
Tribal 
Bonds, 
Jason 
Galanis
arranged 
for 
$15 
million 
to 
be 
sent 
from 
Thorsdale 
to 
RSB. 
RSB 
then 
wired 
$15 
million 
to 
the
indenture 
trustee 
for 
the 
benefit 
of 
WLCC 
to 
purchase 
the 
newly 
issued 
Tribal 
Bonds. 
Most 
of
the 
funds 
received 
in 
this 
issuance 
were 
sent 
again 
to 
WAPCC 
as 
purchase 
money 
supposedly
30

for 
a 
new 
annuity. 
Prior 
to 
receiving 
these 
fiends, 
RSB's 
account 
balance 
was 
about 
$2 
million.
In 
the 
course 
of 
paying 
for 
the 
Tribal 
Bonds, 
Archer's 
bank 
asked 
him 
to 
identify 
the 
source 
of
the 
funds. 
Archer 
facilitated 
the 
recycling 
of 
the 
bond 
proceeds 
by 
telling 
his 
bank 
in 
a 
client
representation 
letter 
he 
signed 
on 
October 
20, 
2014: 
"The 
fiends 
used 
to 
purchase 
the 
bonds 
were
from 
real 
estate 
sales 
through 
my 
business, 
Rosemont 
Seneca 
Bohai 
LLC," 
a 
statement 
Archer
knew 
was 
untrue 
when 
he 
made 
it.
100. 
Jason 
Galanis 
then 
recycled 
a 
portion 
of 
the 
funds 
again, 
this 
time 
to 
fund 
the
acquisition 
of 
a 
new 
$5 
million 
issuance 
of 
Tribal 
Bonds 
by 
Cooney. 
Between 
October 
2 
and 
6,
2014, 
Dunkerley, 
at 
Jason 
Galanis's 
direction 
or 
with 
his 
knowledge, 
sent 
back 
to 
Thorsdale 
a
large 
portion 
of 
the 
funds 
WAPCC 
had 
received 
from 
WLCC 
in 
connection 
with 
the 
$15 
million
sale 
of 
Tribal 
Bonds 
to 
RSB. 
On 
October 
8, 
2014, 
Jason 
Galanis 
sent 
$5 
million 
of 
the 
money
that 
Thorsdale 
received 
to 
Cooney, 
who 
used 
it 
to 
purchase 
Tribal 
Bonds. 
By 
twice 
recycling 
a
portion 
of 
the 
proceeds 
from 
the 
initial 
bond 
issuance, 
Jason 
Galanis 
and 
his 
cohorts 
caused
WLCC 
to 
issue 
$47 
million 
of 
Tribal 
Bonds 
in 
exchange 
for 
$27 
million 
(minus 
transaction
-
related 
fees) 
in 
proceeds.
101. 
Archer 
and 
Cooney 
then 
used 
their 
illegitimate 
Tribal 
Bonds 
to 
benefit 
Burnham
Securities, 
an 
entity 
in 
which 
they 
each 
held 
an 
ownership 
interest. 
In 
Apri12015, 
Archer 
used
RSB's 
Tribal 
Bonds 
to 
purchase 
shares 
of 
Valor 
Group 
with 
Dunkerley 
signing 
the 
documents
on 
Valor 
Group's 
behalf. 
In 
May 
2015, 
one 
of 
Valor 
Group's 
wholly
-owned 
subsidiaries
transferred 
$2.6 
million 
of 
the 
Tribal 
Bonds 
to 
Burnham 
Securities 
to 
boost 
its 
net 
capital 
in
order 
to 
meet 
regulatory 
requirements.
102. 
Similarly, 
in 
May 
2015, 
Cooney 
transferred 
his 
$5 
million 
Tribal 
Bonds 
to
Burnham 
Securities 
in 
a 
transaction 
devised 
by 
Jason 
Galanis 
"to 
get 
Cooney 
some 
reliable
31

income 
while 
getting 
Burnham 
Net 
Cap 
it 
can 
commercialize." 
In 
an 
e-mail 
dated 
April 
24,
2015, 
to 
Cooney, 
Archer 
and 
Burnham 
Financial 
Group's 
President, 
Jason 
Galanis 
instructed
them: 
"if 
we 
hustle, 
we 
can 
get 
the 
$5 
mm 
on 
to 
Burnham's 
balance 
sheet 
this 
month. 
This
would 
require 
Bevan 
[Cooney] 
getting 
the 
physical 
bond 
delivered 
to 
US 
Bank 
for 
transfer 
into
Burnham's 
name."
103. 
Eventually, 
on 
May 
29, 
2015, 
Cooney 
directly 
transferred 
the 
$5 
million 
Tribal
Bonds, 
on 
Burnham 
Securities' 
behalf, 
to 
Broker 
Dealer 
1 
in 
partial 
consideration 
of 
Burnham
Securities' 
purchase 
of 
an 
interest 
in 
Broker 
Dealer 
1. 
Cooney 
received 
nothing 
in 
exchange
from 
Burnham 
Securities 
for 
transferring 
the 
Tribal 
Bonds 
to 
Broker 
Dealer 
1 
on 
Burnham
Securities' 
behalf, 
and 
no 
documents 
evidence 
the 
contribution 
by 
Cooney 
as 
either 
an
investment 
in 
or 
loan 
to 
Burnham 
Securities. 
In 
response 
to 
inquiries 
from 
FINRA 
regarding 
the
specifics 
of 
the 
bonds 
and 
Gooney's 
contribution 
of 
them, 
Jason 
Galanis 
told 
Broker 
Dealer 
1's
President 
to 
tell 
FINRA 
that 
Cooney 
had 
been 
an 
investor 
in 
Burnham 
Securities 
since 
2013 
and
"agreed 
to 
make 
afollow-on 
investment 
in 
2015 
in 
support 
of 
Burnham's 
business 
plan 
to
diversify."
5. 
Jason 
Galanis, 
Hirst, 
Dunkerley 
and 
Martin 
Use 
Tribal 
Bond
Proceeds 
to 
Support 
an 
IPO 
Underwritten 
by 
Burnham.
104. 
At 
the 
direction 
of 
Jason 
Galanis 
and 
Hirst, 
WAPCC 
used 
a 
significant 
portion 
of
the 
proceeds 
from 
the 
sale 
of 
the 
Apri12015 
Tribal 
Bonds 
to 
support 
the 
successful 
initial 
public
offering 
of 
Technology 
Company, 
in 
which 
Jason 
Galanis, 
Hirst, 
Archer, 
Cooney 
and 
Dunkerley
all 
held 
shares, 
and 
for 
which 
Jason 
Galanis 
served 
as 
an 
"advisor."
105. 
In 
February 
2014, 
Jason 
Galanis 
sent 
Dunkerley 
the 
first 
draft 
of 
an 
S-1 
for
Technology 
Company 
in 
connection 
with 
a 
potential 
discussion 
regarding 
"Burnham 
West
handling 
the 
IPO" 
but 
asked 
him 
to 
"not 
distribute 
to 
Burnham 
colleagues 
until 
later 
drafts."
32

Jason Galan~s 
also told 
Dunkerley that 
"Burnham will not be 
expected to 
raise any real 
money,
rather 
will act as 
an 
IPO 
sponsor." 
Jason 
Galanis forwarded 
the 
e-rrtail to Archer and 
Cooney 
to
include 
them in his plans.
106. In 
May 2415, 
Jason Galanis, 
Hirst and 
Martin 
coordinated the 
success of
Teclviology 
Company's IPO, 
which was 
underwritten by 
Burnham 
Securities, with 
Dunkerley
taking a lead on 
the deal. 
Technology 
Company's 
stock was initially 
offered 
on the NASDAQ
on May 19, 
2015 at 
$5/share.
107. 
Between 
Apri129ih and 
May 18th, 
2015, 
Dunkerley, acting 
at Jason Galanis's
direction 
or with his 
knowledge, 
authorized wires 
totaling 
$4,336,000 from the 
WAPCC
Account to two 
brokerage accounts at 
Burnham Securities, in the 
names 
of IPO Participant 1 
and
IPO 
Participant 2. Both accounts 
were opened and 
controlled by 
Martin, at 
the 
direction of
Hirst. Martin 
knew, or was 
reckless in 
not 
knowing, that the source of 
the 
funds for the IPO
Participant 1 and 
IPO Participant 
2 
accounts came 
froze the very 
proceeds he was 
supposed 
to be
managing as an 
independent 
Investment 
Manager 
and under the terms 
of the 
Investment
Management 
Agreement and Annuity 
Contract he 
signed. Under his 
Investment 
Management
Agreement, Martin was 
instructed to 
purchase a 
variable annuity 
"which will 
provide for
sufficient 
cash flow to 
serve [WLCC's] 
debt" under 
the 
Tribal Bonds, not 
facilitate the
movement of 
the proceeds 
into accounts 
used to 
buy 
speculative 
IPO 
securities by Hirst or his
entities.
108. 
IPO 
Participant 1 and IPO 
Participant 2, acting 
through 
Martin in the 
Burnham
Securities 
accounts he 
had opened, 
used $4,335,000 
of the 
funds that they 
received 
from
WAPCC to 
purchase 
867,000 shares of 
Technology 
Company during 
the IPO. 
The shares
purchased by 
Martin in the IPO 
Participant 1 
and IPO 
Participant 2 
accounts represented 
87% 
of
33

the 
shares 
offered 
during 
Technology 
Company's 
TPO. 
The 
remaining 
13%was 
also 
sold 
to
friendly 
accounts, 
including 
accounts 
controlled 
by 
Hirst.
109. 
Martin 
liquidated 
at 
least 
a 
portion 
of 
the 
Technology 
Company 
shares 
in 
the 
IPO
Participant 
1 
and 
IPO 
Participant 
2 
accounts 
immediately 
on 
the 
open 
market 
at 
prices 
ranging
from 
$14 
to 
$36 
per 
share, 
above 
the 
IPO 
purchase 
price 
of 
$5 
per 
share. 
As 
of 
October 
15,
2015, 
Martin 
liquidated 
324,120 
shares 
of 
Technology 
Company 
held 
in 
the 
IPO 
Participant 
I
and 
IPO 
Participant 
2 
accounts 
for 
proceeds 
of 
$4,523,312.
110. 
Despite 
Martin's 
profitable 
trading 
in 
the 
IPO 
Participant 
1 
and 
IPO 
Participant 
2
accounts 
with 
money 
furnished 
by 
WAPCC, 
he 
knowingly 
or 
recklessly 
disregarded 
his 
duties 
to
WLCC 
as 
its 
independent 
Investment 
Manager 
by 
failing 
to 
direct 
the 
full 
$4.3 
million 
back 
to
WAPCC. 
Instead, 
Martin 
sent 
millions 
of 
dollars 
from 
the 
IPO 
Participant 
1 
and 
IPO 
Participant
2 
accounts 
to 
a 
variety 
of 
Galanis-related 
transferees, 
including 
Jason 
Galanis's 
criminal 
defense
attorneys, 
Burnham 
Financial 
Group 
and 
RSB. 
Martin, 
himself, 
also 
received 
$145,000 
from
IPO 
Participant 
1 
and 
IPO 
Participant 
2.
E. 
In 
September 
2015, 
Jason 
Galanis 
and 
Hirst 
Were 
Charged 
and 
Arrested 
in 
a
Separate 
Matter.
111. 
In 
September 
2015, 
the 
Commission 
charged 
Hirst, 
John 
Galanis, 
Jason 
Galanis,
and 
two 
of 
Jason 
Galanis's 
brothers, 
with 
defrauding 
investors 
in 
Gerova, 
whose 
shares 
once
traded 
on 
the 
New 
York 
Stock 
Exchange. 
The 
USAO 
filed 
parallel 
criminal 
charges.
112. 
As 
a 
condition 
of 
his 
release 
on 
bail 
pending 
the 
resolution 
of 
the 
criminal 
charges
against 
him 
in 
US 
v. 
Galanis, 
Jason 
Galanis 
was 
required 
to 
disclose 
whether 
he 
served 
as 
an
officer, 
director, 
consultant, 
advisor 
or 
investment 
banker 
as 
to 
any 
company. 
To 
evade
detection 
by 
law 
enforcement 
authorities 
of 
Jason 
Galanis's 
ongoing 
activities 
with 
respect 
to
I3urnharn 
Securities, 
GMT 
and 
WAPCC, 
Martin 
created 
a 
new 
Internet 
domain,
34

colarisventures.com, 
along 
with 
the 
e-mail 
address, 
le~al(a~colai•isventures.com, 
immediately
after 
Jason 
Galanis's 
arrest. 
Martin 
agreed 
to 
do 
so 
even 
though 
he 
knew, 
or 
was 
reckless 
in 
not
knowing, 
that 
Jason 
Galanis 
wanted 
to 
set 
up 
that 
separate 
domain 
and 
email 
address 
to 
disguise
his 
ongoing 
fraudulent 
conduct. 
Using 
this 
new 
e-mail 
address, 
and 
while 
still 
released 
on 
bail,
Jason 
Galanis 
continued 
to 
correspond 
with 
Dunkerley, 
Archer, 
Cooney 
and 
others, 
going 
so 
far
as 
to 
dictate 
correspondence 
Dunkerley 
should 
send 
to 
third
-parties. 
And 
he 
continued 
to 
direct
business 
decisions 
and 
transactions, 
including 
coordinating 
an 
interest 
payment 
due 
on 
the 
Tribal
Bonds, 
as 
described 
in 
the 
section 
below.
F. 
The 
Aftermath: 
Jason 
Galanis, 
Archer 
and 
Dunkerley 
Continue 
to 
Mislead 
WLCC
and 
Scramble 
to 
Fund 
WAPCC's 
Interest 
Payment 
Obligations 
under 
the 
Annuity
Contracts
1 
] 
3. 
Pursuant 
to 
the 
annuity 
contracts 
in 
connection 
with 
the 
August 
and 
September
2014 
issuances 
of 
Tribal 
Bonds, 
WAPCC 
was 
obligated 
to 
make 
respective 
interest 
payments 
in
September 
2015 
and 
in 
October 
2015. 
Since 
WAPCC 
had 
misappropriated 
the 
proceeds 
from
the 
Tribal 
Bonds 
instead 
o~ 
investing 
them 
in 
annuities, 
separately 
managed 
by 
PEM 
and 
Martin,
Jason 
Galanis 
scrambled 
to 
ensure 
that 
WAPCC 
had 
sufficient 
funds 
from 
other 
sources 
to 
pay
the 
interest 
payments 
that 
were 
due 
in 
order 
to 
protect 
the 
Tribal 
Bond 
scheme 
from 
exposure,
calling 
on 
associates 
far 
contributions 
as 
needed.
114. 
In 
September 
2015, 
Dunkerley 
authorized 
WAPCC 
to 
forward 
$1.5 
million 
to 
the
indenture 
trustee 
as 
interest 
due 
on 
the 
August 
2014 
bonds. 
That 
amount 
covered 
the 
interest
payments 
due 
to 
investors, 
but 
failed 
to 
cover 
an 
additional 
$277,182.87 
in 
annual 
income 
that
WAPCC 
was 
obligated 
to 
pay 
WLCC. 
Based 
on 
the 
sources 
of 
funds 
held 
in 
WAPCC's 
bank
account 
at 
the 
time, 
the 
$1.5 
million 
payment 
that 
it 
did 
make 
was 
funded 
by 
a 
small 
portion 
of
Technology 
Company 
stock 
sale 
proceeds 
it 
received 
from 
IPO 
Participant 
1 
and 
IPO 
Participant
35

2 
($1.3 
million), 
amounts 
contributed 
by 
Archer 
($250,000), 
and/or 
amounts 
received 
from
another 
associate 
of 
Jason 
Galanis 
($250,000).
115. 
After 
he 
had 
been 
arrested, 
using 
his 
new 
le 
al 
,colarisventures.com 
e-mail
address, 
Jason 
Galanis 
orchestrated 
the 
$1,197,311 
interest 
payment 
due 
on 
the 
October 
2014
Tribal 
Bonds 
—bonds 
that 
Archer 
and 
Cooney 
had 
"bought" 
using 
recycled 
proceeds 
from 
the
first 
Tribal 
Bond 
issuance, 
and 
at 
least 
a 
portion 
of 
which 
Burnham 
Securities 
now 
held 
after
they 
had 
been 
contributed 
by 
Valor 
Group's 
subsidiary 
in 
May 
2015. 
First, 
on 
September 
30,
2015, 
Jason 
Galanis 
instructed 
Dunkerley 
to 
tell 
Burnham 
Financial 
Group's 
President 
to 
have
Burnham 
Financial 
Group 
wire 
$903,000 
to 
the 
indenture 
trustee 
on 
behalf 
of 
WLCC. 
That
same 
day, 
in 
order 
to 
make 
that 
payment, 
Burnham 
Financial 
Group 
received 
the 
necessary 
funds
from 
awholly-owned 
subsidiary 
of 
Valor 
Group 
in 
a 
transaction 
Archer 
coordinated. 
The 
next
day, 
RSB 
sent 
Burnham 
Financial 
Group 
an 
additional 
$1,098,000, 
a 
poirtion 
of 
which 
Burnham
Financial 
Group 
used 
to 
send 
an 
additional 
$294,311.11 
interest 
payment 
to 
the 
indenture 
trustee.
In 
other 
words, 
Burnham 
Financial 
Group 
(through 
funds 
provided 
by 
Valor 
Group's 
subsidiary
and 
RSB) 
ended 
up 
paying 
for 
the 
interest 
on 
the 
Tribal 
Bonds 
that 
it 
controlled. 
But 
as 
with 
the
August 
2014 
Tribal 
Bonds, 
WAPCC 
failed 
to 
make 
the 
additional 
income 
payment 
($250,000)
due 
to 
WLCC 
under 
the 
annuity 
contract.
116. 
On 
October 
8, 
2015, 
WLCC 
sent 
Dunkerley 
a 
letter 
expressing 
concern 
regarding
information 
it 
had 
recently 
learned 
about 
Burnham 
Securities 
and 
the 
ongoing 
difficulty 
it 
was
experiencing 
in 
receiving 
funds 
due 
it 
under 
the 
Annuity 
contracts. 
In 
the 
letter, 
WLCC
requested 
that 
Dunkerley 
immediately 
provide 
valuations 
on 
all 
three 
annuity 
contracts.
117. 
On 
October 
15, 
2015, 
at 
Jason 
Galanis's 
direction 
or 
with 
his 
knowledge,
Dunkerley 
responded 
to 
WLCC's 
letter 
and 
attached 
fabricated 
annual 
account 
statements 
on
36

WAPCC 
letterhead 
(reflecting 
an 
address 
in 
the 
BVI) 
for 
the 
annuity 
contracts 
Martin 
had
purportedly 
purchased 
in 
connection 
with 
the 
August 
2014 
and 
September 
2014 
Tribal 
Bonds.
On 
November 
5, 
2015, 
also 
at 
Jason 
Galanis's 
direction 
or 
with 
his 
knowledge, 
Dunkerley
provided 
a 
similar 
fabricated 
amival 
account 
statement 
for 
the 
annuity 
contract 
Martin
purportedly 
purchased 
in 
connection 
with 
the 
April 
2015 
Tribal 
Bonds. 
None 
of 
the 
statements
contained 
any 
information 
regarding 
the 
underlying 
investments 
and 
each 
indicated 
that 
the
value 
of 
the 
accounts 
had 
not 
changed 
one 
penny 
from 
the 
initial 
amount 
of 
money 
that 
had
purportedly 
been 
invested 
in 
the 
annuities.
118. 
On 
February 
17, 
2016, 
after 
the 
Commission 
filed 
its 
complaint 
in 
SEC 
v. 
AAM,
Jason 
Galanis 
sent 
WLCC 
a 
letter 
to 
rebut 
the 
Commission's 
allegations 
and 
to 
assure 
WLCC 
of
the 
Tribal 
Bonds' 
validity 
and 
WAPCC's 
appropriate 
investment 
of 
the 
bonds' 
proceeds. 
In 
the
letter, 
Jason 
Galanis 
pointed 
to 
the 
timely 
payment 
of 
interest 
on 
the 
bonds 
as 
evidence 
of 
their
legitimacy, 
noting, 
"WLCC 
bond 
interest 
of 
over 
$2.72 
million 
was 
already 
paid 
by 
these
distributions 
precisely 
as 
contemplated 
in 
the 
Indenture 
and 
related 
agreement," 
and 
falsely
stated: 
"These 
annuity 
distributions 
will 
continue 
from 
the 
assets 
owned 
in 
the 
annuities.
Therefore, 
the 
WLCC 
bonds 
will 
continue 
to 
be 
paid." 
Among 
other 
things, 
Jason 
Galanis
concealed 
the 
fact 
that 
the 
two 
interest 
payments 
had 
been 
funded 
by 
sources 
other 
than 
annuity
investments.
119. 
More 
recently, 
and 
with 
an 
interest 
payment 
due 
date 
for 
the 
Apri12015 
bond
issuance 
fast 
approaching, 
Jason 
Galanis 
changed 
tacks. 
In 
an 
April 
4, 
20161etter 
to 
WLCC,
Dunkerley, 
writing 
on 
behalf 
of 
WAPCC, 
declared 
that 
WAPCC 
had 
suspended 
its 
interest
payments 
on 
the 
Tribal 
Bonds. 
In 
his 
letter, 
written 
at 
the 
direction 
or 
with 
the 
knowledge 
of
Jason 
Galanis, 
Dunkerley 
notified 
WLCC 
that 
WAPCC 
would 
"withhold 
Annuity 
distribution
37

payment 
to 
WLCC 
until 
such 
time 
as 
WLCC 
provides 
a 
satisfactory 
financial 
surety" 
to
indemnify 
WAPCC 
for 
the 
costs 
it 
and 
its 
"agents" 
incurred 
in 
defense 
of 
the 
Commission's
investigation, 
among 
other 
matters.
G. 
The 
Commission's 
Action 
Against 
AAM
120. 
On 
December• 
15, 
2015, 
the 
Commission 
filed 
an 
emergency 
action 
charging
AAM 
with 
investment 
adviser 
fraud 
for 
investing 
over 
$43 
million 
in 
Tribal 
Bonds 
without
disclosing 
the 
conflicts 
of 
interest 
inherent 
in 
the 
transactions 
arising 
from 
the 
benefits 
the 
bond
sales 
generated 
for 
entities 
related 
to 
AAM's 
parent 
company 
and 
financiers. 
The 
Commission
obtained 
a 
TRO 
appointing 
a 
monitor 
to 
oversee 
AAM, 
in 
order 
to 
protect 
AAM's 
clients 
from
further 
inappropriate 
investments.
121. 
On 
January 
8, 
2016, 
based 
on 
concerns 
identified 
by 
the 
Court
-appointed 
monitor,
the 
Commission 
obtained 
an 
order 
expanding 
the 
monitor's 
powers 
to 
that 
of 
a 
receiver. 
The
receiver 
is 
in 
the 
process 
of 
winding 
down 
the 
company. 
By 
consent 
of 
the 
receiver, 
the
Commission 
has 
obtained 
a 
bifurcated 
judgment 
as 
to 
liability 
against 
AAM.
FIRST 
CLAIM 
FOR 
RELIEF
Violations 
of 
and 
Aiding 
and 
Abetting 
Violations 
of 
Section 
17(x)(1) 
and 
(3) 
of 
the
Securities 
Act
(Against 
Jason 
Galanis, 
Archer, 
Cooney, 
Dunkerley, 
John 
Galanis, 
Hirst 
and 
Martin)
122. 
The 
Commission 
realleges 
and 
incorporates 
by 
reference 
herein 
each 
and 
every
allegation 
contained 
in 
paragraphs 
1 
- 
121.
123. 
Jason 
Galanis, 
Archer, 
Cooney, 
Dunkerley, 
John 
Galanis, 
Hirst 
and 
Martin 
each,
directly 
or 
indirectly, 
singly 
or 
in 
concert 
with 
others, 
by 
use 
of 
the 
means 
or 
instruments 
of
transportation 
or 
communication 
in 
interstate 
commerce 
or 
by 
use 
of 
the 
mails 
in 
the 
offer 
or 
sale
of 
securities, 
with 
scienter, 
employed 
devices, 
schemes 
or 
artifices 
to 
defraud 
or 
engaged 
in
ft~:3

transactions, 
practices 
or 
courses 
of 
business 
which 
operated 
or 
would 
operate 
as 
a 
fraud 
or
deceit 
upon 
a 
purchaser.
124. 
By 
virtue 
of 
the 
foregoing, 
Jason 
Galanis, 
Archer, 
Cooney, 
Dunkerley, 
John
Galanis, 
Hirst 
and 
Martin 
each, 
directly 
or 
indirectly, 
violated, 
and 
unless 
restrained 
and
enjoined, 
will 
continue 
violating, 
Sections 
17(a)(1) 
and 
(3) 
of 
the 
Securities 
Act 
[15 
U.S 
.C. 
§§
77q(a)(1) 
and 
(3)].
125. 
In 
the 
alternative, 
Archer, 
Cooney, 
Dunkerley, 
John 
Galanis, 
Hirst 
and 
Martin
each, 
directly 
or 
indirectly, 
knowingly 
or 
recklessly 
provided 
substantial 
assistance 
to 
Jason
Galanis, 
who, 
directly 
or 
indirectly, 
singly 
or 
in 
concert 
with 
others, 
in 
the 
offer 
or 
sale 
of 
a
security, 
with 
scienter, 
used 
the 
means 
or 
instruments 
of 
transportation 
or 
communication 
in
interstate 
commerce 
or 
used 
the 
mails 
to 
employ 
devices, 
schemes 
or 
artifices 
to 
defraud 
or 
to
engage 
in 
transactions, 
practices 
or 
courses 
of 
business 
which 
operated 
or 
would 
operate 
as 
a
fraud 
or 
deceit 
upon 
a 
purchaser.
126. 
By 
virtue 
of 
the 
foregoing, 
Archer, 
Cooney, 
Dunkerley, 
John 
Galanis, 
Hirst 
and
Martin 
aided 
and 
abetted, 
and 
unless 
restrained 
and 
enjoined, 
will 
continue 
aiding 
and 
abetting,
violations 
of 
Sections 
17(a)(1) 
and 
(3) 
of 
the 
Securities 
Act 
[15 
U.S.C. 
§§ 
77q(a)(1) 
and 
(3)] 
in
violation 
of 
Section 
15(b) 
of 
the 
Securities 
Act 
[15 
U.S.C. 
§ 
77o(b)].
SrCOND 
CLAIM 
FOR 
RELIEF
Violations 
of 
and 
Aiding 
and 
Abetting 
Violations 
of 
Section 
10(b) 
of 
the 
Exchange 
Act
and 
Rules 
lOb-5(a), 
(b) 
and 
(c) 
Thereunder
(Against 
Jason 
Galanis, 
Archer, 
Cooney, 
Dunkerley, 
John 
Galanis, 
Hirst, 
Morton 
and
Martin)
127. 
The 
Commission 
realleges 
and 
incorporates 
by 
reference 
herein 
each 
and 
every
allegation 
contained 
in 
paragraphs 
1 
—  
121.
39

128. Jason Galanis, 
Archer, 
Cooney, Dunkerley, John Galanis, 
Hirst, 
Morton and
Martin each directly 
or• 
indirectly, singly or in concert with others, 
in 
connection with the
purchase 
ox 
sale of 
a security, with scientex, used 
the 
means 
or• 
instrume~italities of interstate
commerce or of the mails ox of a facility 
of a 
national securities exchange to ennploy 
devices,
schemes, ox aa-
tifices 
to defraud; and to engage in acts, practices, 
or courses 
of business which
operated 
or would operate as a fraud 
or deceit 
upon others.
129. 
By 
virtue of the foregoing, Jason Galanis, 
Archer, Cooney, 
Dunkerley, John
Galanis, 
Hirst, Morton and 
Martin each 
violated, and unless restrained and 
enjoined, 
will
continue violating, 
Section 10(b) of the 
Exchange Act [15 U.S.C. § 
78j(b)] and Rules l 
Ob-5(a)
and 
(c) [17 C.F.R.§§ 
240.1Qb-5(a) and (c)].
130. 
Morton directly or• indirectly, singly 
or 
in 
concert 
with others, in connection 
with
the 
purchase or sale of a security, 
with 
scienter, used the means or instrumentalities 
of 
interstate
commerce 
ox 
of the mails 
or of a facility of a national securities 
exchange to 
make an untrue
statement of a material fact or to omit to 
state a 
material fact necessary in order to 
make the
statements made, 
in the light 
of the circumstances under 
wlaich they were 
made, not misleading.
131. By virtue of the 
foregoing, 
Morton violated, and unless restrained 
and 
enjoined,
will 
continue 
violating, Section 10(b) of the Exchange 
Act [15 U.S.C. § 
78j(b)] and Rules l Ob-
5(b) [1? 
C.F.R. § 240.1Ob-5(b)J.
l 
32. In 
the alternative, Archer, 
Cooney, 
Dunkerley, John Galanis, Hirst and Martin
each directly or indirectly, 
provided 
knowing and substantial assistance to 
Jason 
Galanis, who,
directly 
or 
indirectly, singly or in concert with others, 
in 
connection with the purchase ox 
sale of
a 
security, with scienter, used 
the means or 
instrumentalities of interstate 
commerce or 
of the
mails or of a facility of a 
national securities exchange to employ devices, 
schemes, 
or artifices to
1,

defraud; and to engage in acts, 
practices, 
or 
courses 
of business which operated or would 
operate
as 
a 
fraud 
or deceit 
upon 
others.
133. By virtue of the faregoing, Archer, 
Cooney, 
Dunkerley, 
John Galanis, 
Hirst and
Martin each aided and abetted, and unless 
restrained and 
enjoined, will continue aiding and
abetting, violations 
of Section 10(b) of the Exchange 
Act [15 U.S.C. § 
78j(b)] 
and Rules lOb-
5(a) and (c) thereunder [17 
C.F.R.§§ 
240.1Ob-5(a) and (c) ] in violation of Section 20(e) of the
Exchange Act [15 U.S.C. § 78t(e)].
THIRD CLAIM 
FOR 
RELIEF
Violations 
of 
Sections 
206(11, 
206(21 and 206(4) of 
the Advisers Act, and 
Rule 206(4)-8
thereunder
(Against Morton)
134. The Commission realleges and incorporates by reference herein each 
and every
allegation contained in paragraphs 1 - 
121.
135. Morton, while 
acting as an investment adviser, by use of the mails, or 
the 
means
and instrumentalities of interstate commerce, 
directly or indirectly, 
singly or in concert with
others: (a) 
employed devices, schemes,. 
or artifices to defraud her clients or prospective clients
with scienter; and (b) knowingly, recklessly 
or negligently engaged in transactions, 
practices,
and courses 
of business 
which 
operated 
as a fraud or deceit upon 
her 
clients or prospective
clients.
136. 
Morton, while acting as an investment adviser to a pooled 
investment vehicle, (a)
made untrue statements of 
material fact or 
omitted 
to state 
a material fact, necessary to make the
statements 
made, in the light of tl~e circumstances under which they were 
made, not misleading,
to an investor in t ie 
pooled 
investment 
vehicle; and (b) engaged 
in 
acts, 
practices, or courses of
business that 
were fraudulent, 
deceptive, or manipulative with respect to an investor or
prospective 
investor in the pooled investment vehicle.
41

137. By virtue of the foregoing, 
Morton violated, and 
unless 
restrained and enjoined,
will continue violating, Sections 
206(1), (2) and (4) of the 
Advisers 
Act [IS U.S.C. §§ 80b-6(1),
(2) and (4)] and 
Rule 
206(4)-8 
thereunder 
[17 
C.F.R. § 275.206(4)-8].
FOURTH 
CLAIM FOR RELIEF
Aiding 
and Abetting 
Violations 
of Sections 206(1), 206(2) and 
206(4) 
of the Advisers 
Act
and Rule 206(4)-8 Thereunder
(Against Morton)
138. 
The 
Commission realleges 
and incorporates 
by 
reference herein 
each 
and 
every
allegation contained in paragraphs 1 - 121.
139. 
Morton, 
directly or 
indirectly, knowingly 
or 
recklessly 
provided substantial
assistance to 
Hughes and AAM, which, while acting as investment advisers, by use of 
the 
mails,
and 
the 
means 
and 
instrumentalities 
of interstate commerce, 
directly or indirectly, singly or in
concert with others: (a) employed devices, schemes, or artifices to defraud their respective
clients or 
prospective 
clients with 
scienter; and 
(b) 
knowingly, 
recklessly 
or 
negligently engaged
in transactions, practices, 
and 
courses 
of business which operated as a fraud or deceit upon their
respective clients or 
prospective 
clients.
140. 
Morton, directly or indirectly, knowingly or recklessly provided substantial
assistance to AAM which, 
while acting 
as 
an investment adviser to a pooled 
investment vehicle,
(a) 
made untrue statements of material fact or omitted to state a material fact necessary to 
make
the statements 
made, in the light of 
circumstances 
under 
which they 
were 
made, not misleading,
to an investor in the pooled investment vehicle; and (b) engaged in acts, practices, or courses 
of
business 
that were fraudulent, deceptive, 
or manipulative with respect 
to 
an investor or
prospective investor in the pooled investment vehicle.
141. By virtue of the 
foregoing, 
Morton 
aided and abetted, and 
unless 
restrained 
and
enjoined, will continue aiding and abetting, 
violations 
of Sections 
206(1), (2) 
and 
(4) of the
42

Advisers Act 
[15 U.S.C. §.§ 
80b-6(1), (2) and 
(4)], axed Rule 
206(4)-8 thereunder [17 C.F.R. §
275.206(4)-8], in 
vio~latior~ of Section 209(fl 
of the 
Advisers Act [15 U.S.0 . § 80b-9(f~].
PRAYER FOR 
RELIEF
WHEREFORE, 
the Commission respectfully 
requests that 
the 
Court 
enter a Final
.TL1Ci~ri1~11t:
I.
Permanently 
restraining 
and enjoining Jason Galanis, 
Archer, Cooney, 
Dunkerley, John
Galanis, 
Hirst and Martin, their agents, 
servants, 
employees and attorneys and all persons 
in
active concert 
or 
participation with them who receive 
actual notice of the 
injunction by personal
service 
or otherwise, and each of them, 
from 
violating, directly or indirectly, Sections 
17(a)(1)
and (3) of the Securities 
Act [15 U.S 
.C. §§ 77q(a)(1) and (3)];
II.
Permanently 
restraining and 
enjoining Zason Galanis, 
Archer, Cooney, Dunkerley, 
John
Galanis, 
Hirst and Martin, their agents, servants, 
employees 
and attorneys and all persons in
active concert or 
participation 
with 
them who receive actual notice 
of the 
injunction by personal
service 
or 
ofiherwise, and each of them, 
from 
violating, directly or indirectly, Section 10(b) 
of
the Exchange 
Act [15 U.S.C. § ?8j(b)] 
and Rules 
lOb-5(a) 
and (c) 
[17 C.F.R.§§ 
240.1Ob-5(a)
and (c)];
III.
Permanently restraining and 
enjoining 
Morton, her agents, servants, 
employees and
attorneys and 
all persons 
in active concert or 
participation with 
them who 
receive actual notice
of the 
injunction 
by personal service or 
otherwise, and 
each of them, from violating, directly or
indirectly,. 
Section 1Q(b~, of the Exchan~~ 
Act [~ 5 
U.S.C. ~. 78j,(b)], 
and 
Rules lOb-5(a),~(b) and
43

(c) thereunder [17 C.F.R.§~ 
240.1Ob-5(a), (b) and (c)] and 
Sections 206(1), (2) and (4) of the
Advisers Act 
[15 
U.S.C. §§ 
80b-6(1), (2) 
and (4)] and Rule 206(4)-8 thereunder [17 C.F.R. §
275.206(4)-8];
IV.
Permanently 
barring 
Jason Galanis, Archer and Dunkerley from acting as an officer or
director of a public company pursuant to 
Section 20(e) of the 
Securities 
Act 
[15 U.S.C. § 
77t(e)]
and 
Section 
21(d)(2) of 
the 
Exchange Act [ 15 U.S.C. § 78u(d)(2)J; and permanently 
barring
Morton from acting as an officer or 
director of a public 
company pursuant 
to 
Section 21(d)(2) of
the Exchange 
Act [15 U.S.C. § 78u(d)(2)];
V.
Directing 
each 
of 
the Defendants to disgorge all ill-gotten gains, plus 
prejudgment
interest thereon;
U~
Directing Jason Galanis, Archer, Cooney, 
Dunkerley, John Galanis, Hirst and 
Martin to
pay 
civil money 
penalties 
pursuant to 
Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)];
VII.
Directing Jason Galanis, 
Archer, Cooney, 
Dunkerley, John Galanis, Hirst, Morton and
Martin to pay civil money penalties pursuant to Section 21(d)(3) 
ofthe Exchange Act [15 U.S.C.
78u(d)(3)];
VIII.
Directing Morton to pay 
civil money penalties pursuant to 
Section 209(e) of the Advisers
Act [15 U.S.C. § 80b
-9(e)]; and
,~

IX.
Granting such other 
and 
further 
relief as this 
Court deems just and 
appropriate.
JURY DEMAND
Pursuant 
to 
Rule 38 
of the Federal Rules of 
Civil 
Procedure, Plaintiff demands 
that this
case 
be tried to a jury.
Dated: 
New York, New York
November ~, 2016
By:
Andrew M. 
Calamari
Sanjay 
Wadhwa
Adam S. Grace
Nancy A. 
Brown
Tejal D. 
Shah
I-I. 
Gregory Baker
Attorneys for the Plaintiff
SECURITIES AND 
EXCHANGE
COMMISSION
New York Regional Office
Brookfield Place
200 Vesey 
Street, Suite 400
New York, 
New York 10281
(212) 336-1023 (Brown)
Email: brownN 
,,sec.gov
45

ANDREW M. CALAMARI
REGIONAL DIRECTOR
Sanjay Wadhwa
Nancy A. Brown
Tejal D. Shah
H. Gregory Baker
Adam S. Grace
Attorneys for the Plaintiff
SECURITIES AND EXCHANGE COMMISSION
New York Regional Office
Brookfield Place
200 Vesey Street, Suite 400
New York, New York 10281-1022
(212) 336-1023 (Brown)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
----------------------------------------------------------------------- x
SECURITIES AND EXCHANGE COMMISSION,

Plaintiff,

v.

DEVON D. ARCHER, BEVAN T. GOONEY,
HUGH DUNKERL~Y, JASON W. GALANIS,
JOHN P. GALANIS, GARY T. HIRST,
MICHELLE A. MORTON and
F12ANCISCO MARTIN,

Defendants. 
----------------------------------------------------------------------- x

16 Civ. 3505 (WHP)

ECF Case

AMENDED COMPLAINT
AND JURY DEMAND

Plaintiff Securities and Exchange Commission ("Commission"), for its Amended

Complaint against Defendants Devon D. Archer ("Archer"), Bevan T. Cooney ("Cooney"),

Hugh Dunkerley ("Dunkerley"), Jason W. Galanis ("Jason Galanis"), John P. Galanis ("John

Galanis"), Gary T. Hirst ("Hirst"), Michelle A. Morton ("Morton"), and Francisco Martin (also

known as Francisco Martin Fernandez) ("Martin") (together, the "Defendants"), alleges as

follows:



SUMMARY OF THE ALLEGATIONS

1. This case involves a fraudulent scheme orchestrated by Jason Galanis to obtain

undisclosed control over two aegistered investment advisers so that over $43 million of their

clients' funds could be invested in sham Native American tribal bonds (hereinafter, the "bonds"

or "Tribal Bonds"), and ultimately diverted to him and his associates and the entities they

controlled at the expense of unwitting investors.

2. To carry out the Tribal Bond scheme, Jason Galanis enlisted his father (John

Galanis) and six of his associates, Archer, Cooney, Dunkerley, Hirst, Morton, and Martin. As

Jason Galanis told Cooney and Archer prior to the first issuance of the Tribal Bonds, the

"primary objective" was "to get us a source of discretionary liquidity" —liquidity Jason Galanis

would use to fund his and his father's lavish lifestyles, and to expand the corporate empire in

which he, Archer and Cooney had invested. Jason Galanis brought on Hirst, Dunkerley, Morton

and Martin as needed, and compensated them for the roles they knowingly assumed as front nnen

and facilitators.

3. Jason Galanis and John Galanis kicked off the scheme in March 2014, when they

convinced a Native American tribal corporation, the Wakpamni Lake Community Corporation,

affiliated with the Wakpamni District of the Oglala Sioux Nation, whose members live in one of

the poorest regions in the United States (the "WLCC"), to become the issuer of the limited

recourse bands that they had already structured and developed. From August 2014 to April

2015, Jason Galanis and John Galanis arranged for WLCC to issue three tranches of Tribal

Bonds.

4. I-Iaving secured an issuer, Jason Galanis and his associates needed investors to

buy the Tribal Bonds, and they found them in the unsuspecting clients of two investment

2



advisers over which Jason Galanis and his associates gained control. In July 2014, Jason Galanis

arranged the purchase of investment adviser Hughes Capital Ma~►agement, LLC ("Hughes") —

which managed approximately $900 million for various pension funds —and installed Morton as

CEO and part owner. And, in Apri12015, Jason Galanis arranged for Hughes to acquire another

investment adviser with still more pension fund clients' funds under management, Atlantic Asset

Management LLC ("AAM"), and put Morton in charge of the larger enterprise. Jason Galanis

arranged for Valor Group Ltd. ("Valor Group"), an entity controlled by Jason Galanis, Archer,

Dunkerley and others, to provide the financing for both purchases through its wholly-owned

insurance company subsidiaries Wealth-Assurance AG ("Wealth-Assurance") and Valorlife

Lebensversicherungs AG ("Valorlife"), informing Archer and Cooney that this acquisition

promised greater "liquidity" for "their various projects."

5. Morton understood that Vator Group's financing of both acquisitions was

contingent on her agreement to invest Hughes' and AAM's clients' funds in the Tribal Bonds. In

August 2014, at the direction of Jason Galanis, Morton hired Hirst at Hughes and authorized

Hirst to purchase $27 million of Tribal Bonds on behalf of nine Hughes clients. In Apri12015,

again at the direction of Jason Galanis, Morton used $16.2 million of an AAM client's funds to

buy Tribal Bonds.

6. According to the trust indentures and other documents relating to the Tribal Bond

issuances, the proceeds from each issuance were primarily to be invested in an annuity to benefit

WLCC and generate sufficient income to pay interest, and ultimately to repay the principal, to

the bond holders. In connection with each bond issuance, WLCC entered into an annuity

contract with Wealth Assurance Private Client Corporation ("WAPCC"), an entity described in a

private placement memorandum as a subsidiary of Valor Group. Pursuant to each annuity

3



contract, the bond proceeds were to be managed by an independent investment manager, Private

Equity Management LLC ("PEM"), in a separately managed account at WAPCC.

7. However, PEM was a fake entity created at the behest of Jason Galanis solely to

act as a conduit of the proceeds from the bond issuance to Jason Galanis and his associates.

Jason Galanis paid Martin $150,000 to sign the annuity contracts as the purported "Managing

Director" or "Portfolio Manager" of PEM, but Martin never provided any investment

management services. Instead, Jason Galanis gained undisclosed control over the bond

proceeds, anc~ he and the other Defendants used the proceeds for their personal benefit, including

to purchase luxury goods, pay the criminal defense costs of John Galanis and Jason Galanis in a

previously charged case, boost the net capital of two broker-dealers in which Archer and Cooney

had interests, and finance the initial public offering of "Technology Company," a corporation in

which Jason Galanis, Hirst, Cooney, Dunkerley and Archer held shares, and for which Jason

Galanis served as an "advisor."

8. In September 2015, Jason Galanis, John Galanis and Hirst were charged both by

the Commission and by a grand jury convened by the United States Attorney's Office for the

Southern District of New York ("USAO") with securities fraud arising out of a different and

unrelated scheme. SEC v. Galanis, et. al., 15 Civ. 7547 (VSB) (S.D.N.Y.) ("SEC v. Galanis");

and United States v. Jason Galanis, et al., 15 Cr. 0643 (PKC) (S.D.N.Y.) ("US v. Galanis")

Jason Galanis pled guilty to two counts of conspiracy to commit securities fraud, and one count

each of securities fraud and investment adviser fraud. John Galanis pled guilty to one count each

of conspiracy to commit securities fraud and securities fraud. Hirst was convicted after a jury

trial of one count each of conspiracy to commit securities fraud, securities fraud, conspiracy to

commit wire fraud, and wire fraud.

~!



9. While free on bail, Jason Galanis continued to further the fraudulent scherrie

described herein by, among other things, orchestrating payments to the Tribal Bond indenture

trustee to fund the Tribal Bonds' interest payment obligations as they came due.

VIOLATIONS

10. By virtue of the conduct alleged herein, each of the Defendants, directly or

indirectly, singly or in concert, violated and are otherwise liable for violations of the federal

securities laws as follows:

11. Jason Galanis violated:

• Sections 17(a)(1) and (3) of the Securities Act of 1933 ("Securities Act") [15

U.S.C. §§ 77q(a)(1) and (3)]; and,

• Section 10(b) of the Securities Exchange Act of 1934 ("Exchange.AcY') [15

U.S.C. § 78j(b)], and Rules lOb-5(a) and (c) thereunder [17 C.F.R. §§

240.1Ob-5(a) and (c)].

12. Archer, Cooney, Dunkerley, John Galanis, Hirst and Martin violated:

• Sections 17(a)(1) and (3) of the Securities Act [15 U.S.C. §§ 77q(a)(1) and

(3)], or, in the alternative, Section 15(b) of the Securities Act [15 U.S.C. §

77o(b)], by aiding and abetting Jason Galanis's violations of Sections 17(a)(1)

and (3) of the Securities Act [15 U.S.C. §§ 77q(a)(1) an (3)]; and,

Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rules lOb-5(a)

and (c) thereunder [17 C.F.R. §§ 240.1Ob-5(a) and (c)], or, in the alternative,

Section 20(e) of the Exchange Act [15 U.S.C. § 78t(e)] by aiding and

abetting Jason Galanis's violations of Section 10(b) of the Exchange Act [15

5



U.S.C. § 78j(b)], and Rules I Ob-5(a) and (c) thereunder• [17 C.F.R. §§

240.1Ob-5(a) and (c)];

13. Morton violated:

• Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)], and Rules lOb-5(a),

(b) and (c) thereunder [17 C.F.R. §§ 240.1Ob-5(a), (b) and (c)];

• Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940

("Advisers Act") [15 U.S.C. §§ 80b-6(1), (2), and (4)J, and Rule 206(4)-8

thereunder [17 C.F.R. § 275.206(4)-8]; and,

• Section 2090 of the Advisers Act [15 U.S.C. § 80b-9(~] by aiding and

abetting Hughes' and AAM's violations of Sections 206(1) and 206(2) of the

Advisers Act [15 U.S.C. §§ 80b-6(1) and (2)] and aiding and abetting

AAM's violation of Section 206(4) of the Advisers Act [15 U.S.C. § 80b-

6(4)], and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].

JURISDICTION AND VENUE

14. The Commission brings this action pursuant to the authority conferred upon it by

Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)], Sections 21(d)(1) and 21(d)(5) of the

Exchange Act [15 U.S.C. §§ 78u(d)(1) and 78u(d)(5)] and Section 209(d) of the Advisers Act

[15 U.S.C. ~ 80b-9(d)], seeking a final judgment: (a) restraining and permanently enjoining each

of the Defendants from engaging in the acts, practices and courses of business alleged against

them herein; (b) ordering each of the Defendants to disgorge all ill-gotten gains and to pay

prejudgment interest on those amounts; (c) prohibiting Jason Galanis, Archer and Dunkerley

from acting as an officer or director of a public company pursuant to Section 20(e) of the

Securities Act [15 U.S.C. § 77t(e)] and Jason Galanis, Archer, Dunker~ey and Morton from

D



acting as an officer or director of a public company pursuant to Section 21(d)(2) of the

Exchange Act [15 U.S.C. § 78u(d)(2)]; and (d) imposing civil money penalties on Jason Galanis,

Archer, Cooney, Dunkerley, John Galanis, Hirst and Martin pursuant to Section 20(d) of the

Securities Act [15 U.S.C. § 77t(d)]; on Jason Galanis, Archer, Cooney, Dunkerley, John Galanis,

Hirst, Morton and Martin pursuant to Section 21(d)(3) of the Exchange Act [15 U.S.C. §

78u(d)(3)], and on Morton pursuant to Section 209(e) of the Advisers Act [15 U.S.C. § 80b-

9(e)].

15. This Couirt has jurisdiction over this action, and venue lies in this District,

pursuant to Section 22(a) of the Securities Act [15. U.S.C. § 77v(a)] ,Sections 21(d) and 27 of

the Exchange Act [15. U.S .C. §§ 78u(e) and 78aa], and Section 214 of the Advisers Act [15

U.S.C. § 80b-14]. The Defendants, directly or indirectly, made use of the means or instruments

of transportation or communication in interstate commerce, or of the mails, or of a facility of a

national securities exchange, in connection with the transactions, acts, practices, or courses of

business alleged herein, certain of which occurred in this District. For example, Burnham

Securities Inc. ("Burnham Securities"), the placement agent for the sale of the Tribal Bonds, is

located in New York, New York.

DEFENDANTS

16. Jason Galanis, age 45, resides in Los Angeles, California. Jason Galanis was the

subject of a prior• Commission enforcement action, SEC v. Penthouse Int'1, Inc., et al., OS Civ.

0780 (S.D.N.Y.), for engaging in accounting fraud and financial reporting violations. On April

27, 2007, pursuant to a settlement with the Commission, he was enjoined from violating Sections

10(b) and 15(d) of the Exchange Act, including Rule l Ob-5, and was barred from serving as an

officer and director of a public company for a period of five years, a bar which expired in 2012.

7



In September 2015, Jason Galanis was sued by the Commission and indicted by a grand jury

convened by the USAO, based on allegations that he orchestrated a fraudulent and unregistered

public distribution of millions of dollars of shares of a publicly traded company, Gerova

Financial Group, Ltd. ("Gerova"). See SEC v. Galanis; US v. Galanis. He has since pled guilty

to various securities laws violations in US v. Galanis and is incarcerated pending his sentencing

in that matter.

17. John Galanis, age 73, resides in Oceanside, California. John Galanis is the father

of Jason Galanis, and has been the subject of numerous prior criminal proceedings, as well as

enforcement actions by the Commission, dating back to the late 1960s. Most recently, John

Galanis was charged by the SEC and USAO for his alleged involvement in the Gerova scheme.

See SEC v. Galanis; US v. Galanis. Like his son, Jason, John Galanis pled guilty to various

securities-related violations in US v. Galanis, and awaits sentencing.

18. Archer, age 42, resides in Brooklyn, New York. Archer was, at times relevant

herein, a director, officer and direct or indirect owner of and/or investor in various entities

connected to the Tribal Bond scheme including Valor Group, Valorlife, COR Fund Advisors

LLC ("CORFA"), Burnham Financial Group, the holding company for broker-dealer Burnham

Securities, BAM Holdings, LLC, the holding company for investment management companies

operating under the Burnham name, including Burnham Asset Management Corporation

("BAM"), Rosemont Seneca Bohai LLC ("RSB"), a Delaware limited liability corporation that

he wholly owns, and BOE Capital, LLC, a Delaware limited liability corporation that he wholly

owned as of August 12, 2014.

19. Cooney, age 43, resides in Incline Village, Nevada. Jason Galanis has described

Cooney as his "best friend of 23 years and equity holder in all the businesses." At all relevant



times herein, Cooney was a direct or indirect owner of CORFA, through which he owned an

interest in Burnham Securities.

20. Dunkerley, age 41, resides in Irvine, California. At relevant times herein, he

served as the Director, President, Executive Vice President and Secretary of Valor Group,

Director of Wealth-Assurance, Director of Valorlife and a Managing Director of Burnham

Securities. He is currently Sole Director and President of WAPCC and Managing Member of

BFG Socially Responsible Investing Limited ("BFG Investments"), having been installed in each

of these management positions by Jason Galanis. At all relevant times, Dunkerley acted at the

direction of Jason Galanis or with his knowledge.

21. Hirst, age 63, resides in Lake Mary, Florida, but is currently incarcerated pending

his sentencing in US v. Galanis. He served as Hughes' Chief Investment Officer ("CIO") in

August 2014 and directed the investment of over $27 million of Hughes' clients' funds in Tribal

Bonds. Hirst is the Assistant Secretary of WAPCC and signatory on its bank account. In

September 2015, Hirst was charged by the Commission and the USAO along with Jason Galanis

and John Galanis in connection with the Gerova scheme. See SEC v. Galanis; US v. Galanis.

On September 28, 2016, a jury convicted Hirst of various securities-related violations in US v.

Galanis.

22. Morton, age 55, resides in Colonia, New Jersey. She served as the CEO of

Hughes and AAM, and owned an interest in Hughes' and AAM's parent company, GMT Duncan

LLC ("GMT"). In her capacity as CEO of Hughes and AAM, Morton oversaw the investment of

over $43 million of client funds in Tribal Bonds.

23. Martin, age 42, resides in Woodland Hills, California. Until June 2016, Martin

was the sole owner and CCO of Malaga Asset Management, LLC, an SEC-registered investment

7



adviser. At times relevant herein, Martin held himself out as Portfolio Manager and/or

Managing Director of PEM.

OTHCR RELEVANT ENTITIES

24. Burnham Securities, an SEC-registered broker dealer based in New York, New

York, served as the placement agent for the Tribal Bonds. At all relevant tunes, Burnham

Securities was wholly owned by Burnham Financial Group. Beginning in 2014, Jason

Galanis, Archer and Cooney gained control of Burnham Financial Group and Burnham

Securities, through, at least in part, CORFA, a Delaware limited liability company in which

Jason Galanis, Archer and Cooney held direct or indirect ownership interests at relevant times

herein.

25. WAPCC was incorporated by Dunkerley in the British Virgin Islands and was

purportedly the annuity provider in connection with the Tribal Bonds. Dunkerley also

incorporated a company called WAPCC in Florida and opened an associated bank account (the

"WAPCC Account") for which he and Hirst are the only signatories, and to which the net Tribal

Bond proceeds were sent by the Indenture trustee.

26. Valor Group was incorporated as Wealth Assurance Holdings Ltd. by Dunkerley

in the British Virgin Islands in 2013, and changed its name to Valor Group Ltd. in December

2014. Through Thorsdale Fiduciary and Guaranty Company Ltd. ("Thorsdale"), a Nevada

incorporated family trust company Jason Galanis controls, Jason Galanis holds a significant

ownership interest in Wealth Assurance Holdings Ltd., and its successor, Valor Group. In 2013,

Wealth Assurance Holdings Ltd. purchased Wealth-Assurance, and Dunkerley was appointed

to Wealth-Assurance's Board of Directors. In November 2014, Wealth Assurance Holdings Ltd.

acquired Valorlife. Jason Galanis became a paid advisor to Valorlife's Board of Directors in

10



December• 2014. Wealth-Assurance provided the financing for GMT's purchase of Hughes, and

Valorlife provided the financing for GMT's purchase of AAM. In addition, Wealth-Assurance's

subsidiary, BFG Investments, became an indirect owner of Hughes and AAM by virtue of an

ownership interest it acquired in GMT.

27. AAM is an SEC-registered investment adviser which was principally located in

Stamford, Connecticut. In Apri12015, AAM was purchased by GMT and merged with Hughes,

an SEC-registered investment adviser, which was principally located in Alexandria, Virginia.

The merged entity retained AAM's name. AAM was charged by the Commission in connection

with its investment of client funds in the Tribal Bonds in December 2015 and is now in

receivership and in the process of winding down. See SEC v. AAM, 15 Civ. 9764 (WHP)

(S.D.N.Y).

28. PEM was a company set up by Martin and purportedly domiciled in the British

Virgin Islands. Martin acted as its Managing Director and Portfolio Manager. Martin signed the

Investment Management agreement with WLCC on behalf of PEM for each of the tranches of

Tribal Bond issuances described below, even though he understood that neither he nor PAM

would have any role for carrying out the functions assigned to him in the agreement. The

Investment Management agreement designated PEM as the independent Investment Manager for

the Tribal Bond proceeds and gave it the authority to direcfi the investment of the proceeds

pursuant to certain stated investment guidelines.

FACTS

29. The Tribal Bond scheme orchestrated by Jason Galanis consisted of four parts: 1)

pitching WLCC to issue the Tribal Bonds; 2) engineering the Tribal Bond issuances to give

Jason Galanis and his associates undisclosed control over the Tribal Bond proceeds; 3) securing



victims to purchase the Tribal Bonds; and 4) misappropriating the Tribal Bond proceeds for the

benefit of Jason Galanis and his associates, including the Defendants.

30. E-mails among Jason Galanis, Archer and Cooney reflect their intent, from the

outset of the scheme, to control and use the proceeds from the Tribal Bonds for their personal

benefit. In April 2014, when an initial issuance of $20 million bonds appeared imminent, Jason

Galanis e-mailed Archer and Cooney: "$2Q mm bond approved. Proceeds are $15 mm to us and

5 mm to them." In July 2014, after WLCC had approved issuing the bonds, Jason Galanis e-

mailed Archer and Cooney: "My primary objective is to get us a source of discretionary

liquidity. Sick of begging."

A. The Pitch: John Galanis Finds a Bond Issuer.

31. John Galanis handled the initial efforts to find a bond issuer for the scheme. In or

about March 2014, John Galanis attended a Native American economic development conference

in Las Vegas, Nevada and made a presentation to several tribes regarding a prospective Native

American bond issuance. John Galanis purported to be representing Burnham Securities, even

though he had no official connection to Burnham Securities.

32. John Galanis's presentation to prospective Native American bond issuers had all

the necessary players (except the issuer) in place, including Burnham Securities as the Placement

Agent. During the conference, a representative of WLCC indicated to John Galanis that WLCC

would be interested in participating in the issuance. John Galanis was WLCC's primary point of

contact regarding the Tribal Bonds throughout the scheme and induced WLCC to issue each

tranche of Tribal Bonds.

12



B. The Tribal Bonds Are Structured to Allow Jason Galanis and Dunkerley to
Control the Bond Proceeds.

33. Jason Galanis and John Galanis arranged for WLCC to issue three tranches of

Tribal Bonds: a) $27,077,436 in August 2014; b) $20,000,000 in September 2014; and c)

$16,200;000 in Apri12015. The first and last issuances defrauded investment adviser clients of

Hughes and AAM. The middle issuance did not represent an additional capital raising event;

instead, bond proceeds from the first issuance were used to purchase newly issued Tribal Bonds,

so that Jason Galanis, Archer, Cooney and Dunkerley could obtain $20 million worth of bonds

for their own use without any capital outlay on their part.

34. To Jason Galanis, the Tribal Bonds were simply a source of cash, providing him

with the liquidity he needed to expand the corporate empire he sought to assemble with Archer,

Cooney and Dunkerley. In one revealing email to Archer and Cooney from August 2014, Jason

Galanis proposed an acquisition of a European fund of funds —brought to him by Dunkerley —

and identified the source of funds for the acquisition as proceeds from a Tribal Bond issuance.

After describing the deal, Jason Galanis wrote: ~"Hugh [Dunkerley] [has] locked it up and came

to me for the money, which i have agreed to arrange/provide (probably Indians)."

35. Each Tribal Bond issuance was governed by an indenture that provided for the

vast majority of proceeds to be invested in an annuity that was supposed to generate income

su€ficient to pay interest to the bond investors, plus a smaller annual sum to WLCC for use in

various development projects. The interest payments and ultimate repayment of the principal of

the bond issuance depended on the success of the investments held by the annuity in which the

proceeds of the issuances were to be invested.

13



36. In Tune 2014, Burnham Securities' counsel provided WLCC with a summary of

the bond program that listed Wealth-Assurance as the Annuity Issuer and PEM as the Portfolio

Manager.

37. In May 2013, Jason Galanis had arranged Valor Group's purchase of Wealth-

Assurance, purportedly aLiechtenstein-based life insurance and annuity provider with €1.5

billion in assets under management, and soon after installed Dunkerley on its Board of Directors.

Ultimately, Wealth-Assurance never provided any annuity contracts in connection with any of

the bond issuances.

38. In August 2014, when WLCC issued its first bonds, PEM nominally became the

independent investment manager for the bond proceeds. The trust indenture and a separate

investment management agreement with WLCC tasked PEM with selecting an annuity provider

and placing the bond proceeds in a variable annuity. Martin signed the investment management

agreement on behalf of PEM as its Managing Director.

39. However, Martin was not an independent investment manager but simply a shill

for Jason Galanis. In return fora $150,000 fee (ultimately paid to him out of bond proceeds that

were supposed to be invested in the annuity), Martin agreed to act on behalf of PEM in signing

the Investment Management Agreement with WLCC with full knowledge that he would perform

none of the investment management duties set out in the contract.

40. Although the annuity contract named PEM as the independent manager of the

monies held by the annuity provider in a separately managed account, Martin exercised no

authority over any such account and made no investment decisions regarding the funds. In

signing the annuity contract with WAPCC, Martin knew, or was reckless in not knowing, that he

14



was funneling the bond proceeds directly to the control of Jason Galanis and his associates and

entities.

41. The annuity provider was not chosen by Martin, but by Jason Galanis. Instead of

selecting Wealth-Assurance, Jason Galanis selected WAPCC. The annuity contract between

WLCC, WAPCC and PEM, by Martin, identifies WAPCC as a British Virgin Islands ("BVI")-

incorporated entity that is "part of the Wealth-Assurance Group of companies."

42. In fact, Dunkerley is the sole shareholder of WAPCC and it has no known

affiliation with Wealth-Assurance. At Jason Galanis's instruction, ox with his knowledge,

Dunkerley incorporated WAPCC in the BVI on August 22, 2014, just four days before Jason

Galanis selected WAPCC as the annuity provider for the first issuance of the Tribal Bonds.

WAPCC's unaudited financial statements reflect that through the end of December 2014, WLCC

was WAPCC's only annuity "counterparty."

43. Also contrary to the annuity contract between WAPCC, WLCC and PEM, the

bond proceeds were not directed to a WAPCC account at a bank "without any offices and/or

branches in the United States." Instead, the indenture trustee was instructed to send the bond

proceeds to a bank account at a Florida branch of a US bank, in the name of an identically named

company that had been incorporated in Florida on July 7, 2014.

44. In its Florida incorporation papers, WAPCC listed Dunkerley as its sole officer,

and gave its mailing address as a post office box in Florida used by Hirst. As described below,

the misappropriation of the bond proceeds all flowed from the WAPCC Account associated with

WAPCC in Florida.

15



C. Jason Galanis Secures Victims to Purchase the Tribal Bonds by Obtaining Control
over Hughes and AAM.

45. In order to secure victims to purchase the Tribal Bonds, Jason Galanis aid his

associates arranged to obtain control over two investment advisers, thereby gaining access to

captive client funds. First, in August 2014, Jason Galanis, Archer, Cooney and Dunkerley

obtained control over Hughes, and Jason Galanis, Morton and Hirst arranged for Hughes to

invest $27 million of its clients' funds in Tribal Bonds. Second, in Apri12015, Jason Galanis,

Archer, Cooney and Dunkerley obtained control over AAM, and Jason Galanis and Morton

arranged for AAM to invest $16.2 million of its clients' funds in Tribal Bonds.

1. Hughes

46. In May 2014, Jason Galanis was introduced to Morton, the half-owner of GMT,

which had the stated business purpose of providing socially responsible fixed income investment

management and advisory services as a minority business enterprise. Together, Jason Galanis

and Morton began negotiating to purchase Hughes, an investment adviser with approximately

$900 million under management, based in Alexandria, Virginia.

47. On June 3, 2014, Jason Galanis provided Morton with a document to provide to

Hughes' then-owner to "demonstrate who [Morton's] financial sponsors are." The document

described a private equity control investor that owned several businesses, including Wealth-

Assurance and Burnham Securities. On June 5, 2014, Jason Galanis sent Morton a term sheet

outlining the terms by which CORFA — a corporation owned in part by Jason Galanis, Archer

and Cooney —would directly or indirectly (through a subsidiary) finance GMT's purchase of

Hughes. Archer and Cooney knew that their agreement to finance the Hughes' acquisition with

CORFA funds was a necessary part of the plan to place the Tribal Bonds and obtain "liquidity"

for themselves and their corporate expansion projects.

16



48. Jason Galanis kept Archer and Cooney in the loop regarding the negotiations to

acquire Hughes. On July 16, 2014, he sent them a copy of the executed term sheet for the

acquisition of Hughes. He proclaimed: "I believe they will take $28 million of the [Tribal]

issue." Cooney and Archer expressed their enthusiasm, with Cooney replying: "West Coast

Offense charging down the field!" Archer added: "This is very encouraging!"

49. On August 1, 2014, Jason Galanis sent Morton a text message stating that he

would form BFG Investments —the entity through which the contribution to the acquisition

would be made —the next day. On August 5, 2014, at the direction of Jason Galanis, Dunkerley

formed BFG Investments and became its managing member.

50. One week later, GMT entered into an amended and restated operating agreement

with its members, pursuant to which BFG Investments became a "Preferred Member." The

agreement was signed by Dunkerley on behalf of BFG Investments, and stated that notices to

BFG Investments were to be sent to Archer. After the merger closed, Hughes became GMT's

subsidiary and Morton and her business partner became officers of Hughes.

51. On August 12, 2014, Jason Galanis arranged for Wealth-Assurance to fund BFG

Investments' initial capital contribution of $2,660,618 to GMT, which GMT used to finance its

purchase of Hughes.

52. As Morton knew, Jason Galanis, Archer, Cooney and Dunkerley's agreement to

finance the acquisition of Hughes was contingent on her agreement to invest Hughes' client

funds in Tribal Bonds. In July 2014, even be€ore the purchase of Hughes had been completed,

Morton e-mailed Jason Galanis "an update on how we will place the bonds in a portfolio" and

promised him via text message, "I will make sure you make a TON of money and smile all the

way to the bank." On August 12, 2014, Morton sent Jason Galanis a text message noting, "You

17



invested because of the bonds not me," to which he responded: "The bonds are only possible

because of you my dear."

53. Pursuant to GMT's amended operating agreement, BFG Investments was

accorded certain privileges, including the right to approve the CIO for GMT and Hughes, and to

appoint members to Hughes' board.

54. Before GMT completed its purchase of Hughes, Jason Galanis introduced Morton

to Hirst as a potential CIO. On August 12, 2014, Hirst sent Morton a draft employment contract.

Hirst and Morton executed the contract and related paperwork that same day.

55. However, a few days later, Hirst informed Morton that he did not want Hughes to

disclose his name in its Form ADV, a form that investment advisers registered with the

Commission are required to file upon registration and annually thereafter. For that reason, Hirst

decided to resign as Hughes' CIO and agreed to act as a paid independent investment consultant

instead, a position that he understood would not require disclosure on Hughes' Form ADV. As

Morton told Jason Galanis, "In regard to Hirst, he opted to be a consultant because as an

employee he would have been required to make certain disclosures for our AllV... If we want

to follow the contract which has him as CIO its [sic] no problem, we just have to change the title,

but he has to make the disclosures per regulations."

56. By August 14, 2014, just two days after the purchase of Hughes was completed,

Jason Galanis and Hirst worked to invest Hughes client funds in the Tribal Bonds. Hirst quickly

undertook an analysis of Hughes' clients' accounts and investments to determine what could be

liquidated to generate fiends to purchase Tribal Bonds.

57. Morton asked Hughes' compliance officer to conduct an analysis of the

investment guidelines of seven of Hughes' clients to determine whether they allowed for

18



purchase of the Tribal Bonds. The compliance officer concluded that most of the clients'

guidelines prohibited privately-placed, unrated bonds like the Tribal Bonds, and that in no case

could the investment be made without consulting the client first.

58. On August 17, 2014, Jason Galanis, using aBurnham-affiliated e-mail address

(burnhamequitypartners.com), e-mailed Morton a copy of the draft trust indenture for the Tribal

Bonds. It provided that the bond proceeds would be invested in an annuity that would be issued

and managed by Wealth-Assurance. In addition, pursuant to a Placement Agency Agreement for

the Tribal Bonds, Burnham Securities was entitled to a $250,000 fee from the bond sale

proceeds. The agreement stated that notices to Burnham Securities should be sent to Jason

Galanis (spelled "Galanos" in the agreement) and was signed by Dunkerley. Morton knew that

Burnham Securities would be acting as the Placement Agent for the Tribal Bonds.

59. On August 17, 2014, Morton e-mailed Jason Galanis, acknowledging the conflicts

of interest presented by her investment of client funds in a transaction in which affiliated

companies —Wealth-Assurance and Burnham Securities —stood to benefit. She complained that

she was spending much time performing due diligence regarding the Tribal Bonds "because of

the multiple views I had to take." She explained: "For instance, since many of the accounts are

ERISA funds, I had to consider those guidelines and regulations, I have a fiduciary duty to

Burnham, and a fiduciary duty to the clients."

60. In another e-mail dated August 17, 2014, Morton sent Jason Galanis a memo

articulating concerns regarding the Tribal Bonds. Among other things, Morton's memo

questioned whether the tribe affiliated with the issuer—a tribal corporation operating in an

impoverished region—would be legally or financially accountable for the Tribal Bonds and

whether institutional clients would fire Hughes if they were dissatisfied with the investment.

19



61. In her e-mail transmitting the memo to Jason Galanis, Morton wrote, in reference

to BFG Investments' investment in Hughes: "The decision regarding what s~iould be done is

yours, not mine... To be fair to both of us, if you made the investment with this in mind, I do

not have the moral right to stand in the way and everything is in place to move forward...."

She reiterated in a text message to Jason Galanis: "Let's be clear, if you want the bonds to go in,

I have no say. I am not sitting in the position of making a judgement [sic]. If you invested in

Hughes for this sole purpose than it is your call not mine... If you're thinking that I can or would

stop this then I have totally screwed up my communication." Jason Galanis told Morton to let

Hirst "rake the decision."

62. Between August 22 and 26, 2014, Hirst signed trade tickets purchasing

$27,077,436 of Tribal Bonds on behalf of nine of Hughes' clients. The funds were sent to a trust

account at US Bank for the benefit of WLCC. Neither Morton nor Hirst informed any of those

clients about the investments beforehand. As one of the costs of issuance associated with the

bonds, WLCC paid Burnham Securities a $250,000 placement agent fee out of the bond

proceeds, of which $125,000 was then paid to Dunkerley as his share of the fee.

63. Morton and Hirst knew that Morton's "financial sponsors," including Jason

Galanis and Dunkerley, were associated with Wealth-Assurance and Burnham Securities, which

had been described to her as the annuity provider and placement agent, respectively—entities

that would financially benefit from Hughes' clients' purchases of the Tribal Bonds.

Nevertheless, neither she nor Hirst disclosed to Hughes' clients that Hughes was investing their

funds in investments that would financially benefit its undisclosed part owners and financiers.

64. Upon learning of the investments in the bonds, several Hughes clients expressed

concerns regarding the bonds' valuation and suitability and demanded that the investments be

20unwound. Morton assured them that Burril~am Securities, as the placement agent, had other

clients interested in the bonds and was in the process of arranging purchases. However, despite

repeated promises, Burnham Securities never produced buyers for the bonds, and none of

Hughes' clients was able to liquidate its position in the bonds.

2. AAM

65. In the fall of 2014, Jason Galanis began searching for additional investors to

purchase another tranche of Tribal Bonds. Morton identified AAM, an investment manager with

$11 billion in assets under management, as a potential target for Hughes.

66. During the course of Morton's negotiations to acquire AAM, on October 30,

2014, Morton e-mailed Jason Galanis that she had had a conversation with AAM's Chief

Strategist "about our SRI [Socially Responsible Investing]/Native American Initiative" and that

"he is so on board with this." According to Morton, AAM's Chief Strategist told her that if she

made him aware of the details of the bonds ahead of time, he would do his "damndest to get it

placed within a day after the acquisition." Jason Galanis forwarded the e-mail to Cooney and

Archer, with the note "working on more liquidity and sources for the various projects...see

below. Promising." Cooney replied: "Very promising Greco! !"

67. With the backing of Jason Galanis, Archer, Cooney and Dunkerley, Morton

continued to negotiate with AAM. On December 1, 2014, at Jason Galanis's direction or with

his knowledge, Dunkerley provided AAM's General Counsel a letter on behalf of the "Cor

Group of Companies, Inc.," a CORFA affiliate, confirming its agreement to provide financing to

capitalize the purchase of AAM. On February 2, 2015, Jason Galanis sent Archer and Cooney a

"consultant report" directed to the "Board of Valorlife" regarding the financing of the proposed

acquisition of AAM. Valorlife was a foreign insurer that Valor Group had acquired in

November 2014.

21



68. On Apri12, 2015, at the direction of Jason Galanis, Valorlife financed the

purchase of AAM through BFG Investments with an upfront capital contribution of $6,120,398.

In addition to the upfront capital contribution, the purchase of AAM also included an agreement

to make a deferred payment of $4,854,420, payable pursuant to two Reset Notes. The deferred

payment was guaranteed by Valor Group and the guaranty was signed by Dunkerley as Valor

Group's President.

69. On March 30, 2015, Jason Galanis forwarded copies of the executed AAM

acquisition documents to Cooney, Archer and Burnham Financial Group's President, and

Cooney replied: "18 Balloons! ! ! Fantastic J! ! !" The terms of the purchase were memorialized

in an Amended and Restated Liability Company Agreement for GMT ("Restated Agreement"),

entered into as of Apri12, 2015. Dunkerley signed the agreement on behalf of BFG Investments

as its Managing Member.

70. Pursuant to the Restated Agreement, AAM became GMT's wholly owned

subsidiary. The Restated Agreement provided that AAM's Board of Managers was to consist of

four persons, comprised of two Class A Holders (Morton and her business partner) and two

persons selected by BFG Investments as the Class B Holder. Together, the Board of Managers

was granted the exclusive right to control AAM. In addition, GMT was required to appoint a

CIO that was acceptable to BFG Investments.

71. Immediately after the acquisition of AAM was completed, and in furtherance of

his pledge to Archer and Cooney to obtain more "liquidity" for their "various projects," Jason

Galanis instructed Morton to identify investors to purchase additional Tribal Bonds. By that

point, Morton was aware that there was no active market for the bonds. Since at least November

2014, she had been dealing with client complaints, including threatened litigation, regarding the

22



original bond investments by Hughes' clients and had been unsuccessful in her efforts to arrange

for Burnham Securities to find buyers or purchase them itself. Indeed, in January 2015, she e-

mailed Jason Galanis: "I thought that if necessary B[urn~iam] would bid on the bonds if the

clients. wished. It appears not to be the case. We have received one formal communication and I

expect we will receive others in the coming days."

72. As before, Morton learned that entities affiliated with her "financial sponsors,"

including Jason Galanis, Archer, Cooney and DunkerYey, would financially benefit from the sale

of this tranche of Tribal Bonds. On Apri19, 2015, Burnham Securities' counsel sent Morton a

private placerrient memorandum for the new issuance of Tribal Bonds. Like the August 2014

Tribal Bonds issuance, it provided that the proceeds of the new issuance would be used for

transaction costs, including a placement agent fee, and to purchase an annuity. It identified

"Wealth Assurance Private Client Corporation, a subsidiary of Valor Group" as the underwriter

and issuer of the annuity contract. It also disclosed that pursuant to a placement agreement

entered into between the issuer, WLCC, and Burnham Securities, "Burnham Securities will

receive an $80,040 fee from the Issuer for the sale of the Bonds by the Issuer."

73. On April 10, 2015, Jason Galanis sent Morton a "Class A board member

communication request," irr which he demanded a conference call to discuss a number of

business related items. In the e-mail, Jason Galanis expressed frustration regarding AAM's lack

of support for a potential investment in additional Tribal Bonds: "On the Native American

initiative, this was and has been a fundamental part of the business plan since we met... "and

"[i]t is in everyone's interest to maintain their word." In the e-mail, Jason Galanis stated: "I am

not a member of the board. However, I was responsible for arranging the financing for the

company and have been requested to continue to be the lead in liaising with tie investors."

23



74. On April 14, 2015, Morton e-mailed Jason Galanis explaining that they "had a

challenge regarding bond placement," and proposing that they could "mitigate the challenge o~

restrictive investment policies by going directly to our client base (which numbers over 40

clients) and introduce the concept. Exceptions to investment policies occur all of the time, the

key is to have the relationship necessary and begin the discussions in advance of the placement."

In the same e-mail, Morton also requested a $500,000 loan, explaining that AAM was suffering

from financial difficulty and was struggling to pay its operating costs. Jason Galanis replied to

Morton's message, "Let's talk, I don't like e-mail."

75. The next day, Morton texted Jason Galanis: "I would really like to have clarity on

the working capital as soon as possible. The trade will go through in the am." Jason Galanis

replied: "Will wire 305 on Friday. Worst Monday." On April 16, 2015, Morton directed the

investment of $16.2 million of an AAM client's funds in the new issuance of Tribal Bonds. One

week later, AAM received a $305,000 payment, funded by bond proceeds from the WAPCC

Account in Florida and authorized by Dunkerley at Jason Galanis's direction or with his

knowledge.

76. Morton arranged for AAM to use funds maintained in one of its managed fiends

(the "HY Fund") for the bond purchase. HY Fund implements a strategy of making diverse, high

yielding, liquid investments through designated investment managers. HY Fund's only investor

was Pension Fund 1, an existing client of AAM's for which AAM managed other investments in

addition to its investment in the HY Fund.

77. The purchase of the Tribal Bonds was inconsistent with HY Fund's investment

strategy, and notwithstanding her previous e-mail to Jason Galanis suggesting that AAM

~~



"introduce the concept" to Pension Fund 1 prior to making the investment, Morton did not

discuss the purchase of the bonds with Pension Fund 1 prior to making the investment.

78. After the purchase, on Apri123, 2015, Morton informed Pension Fund 1 about the

investment in the bonds and the fact that there was a potential conflict of interest because the

individuals who controlled the annuity provider and the placement agent were also AAM's

financiers. Morton did nat tell Pension Fund 1 that those same individuals were also AE1M's

part-owners, and the largest source of AAM's capital. Nor did Morton disclose that Jason

Galanis had promised her additional funding for AAM in connection with her approval of the

bond purchase.

79. The next day, Pension Fund 1's Executive Director informed AAM that it

"strongly disagree[d]" with the purchase of the bonds and that Pension Fund 1 "should have been

provided advance notice of this questionable purchase, particularly due to the fact that a conflict

of interest exists in the purchase." Pension Fund 1 demanded that the bonds be liquidated

immediately.

80. Once again, Burnham Securities promised to find a purchaser for the bonds.

However, neither Burnham Securities nor AAM was able to find any purchaser for the Tribal

Bonds.

81. Pension Fund 1 sent AAM a notice of redemption of all of its funds in HY Fund

on September 24, 2015 and, on October 29, 2015, it notified AAM that it was redeeming the rest

of its funds under AAM's management. Pension Fund 1 explained that its decision to end its

relationship with AAM was based on Morton's "unilateral actions (which [were not yet]

reversed) to violate investment guidelines and purchase inappropriate securities with the money

contributed by the hard working members of [Pension Fund 1]."

25



82. In October 2015, Dunkerley, on behalf of Burnham Securities, e-mailed AAM

acknowledging the lack of a market for the bonds, and admitted that they could not even be

priced: "You may want to refer to the risks section of the. PPM where it clearly says there is `no

market for these and none is expected to develop in the future' .... This situation is clearly true

at the moment and given the current investigation any price attributed to these bonds may not be

appropriate for accounting or even misleading for any other purposes."

83. At the time, Dunkerley knew that, contrary to the annuity contract he had signed,

none of the bond proceeds had been sent to a separate account held by WAPCC BVI and

managed by PEM, but, in accordance with the scheme, had instead been sent to the separately

incorporated WAPCC in Florida and misappropriated from there.

D. Jason Galanis, John Galanis, Dunkerley, Hirst, Archer and Cooney Misappropriate
the Tribal Bond Proceeds.

84. Based on the documents governing the sate of the $43.2 million in Tribal Bonds

to Hughes and AAM clients, and after the deduction of various issuance costs and up-front

payments to WLCC, $40.1 million of the bond proceeds were to be invested by PEM in annuities

issued by WAPCC in BVI. The bonds issued to Hughes investors were to pay 5.62% interest

annually and mature in 10 years; the bonds issued to AAM's HY Fund were to pay 6.02%

interest annually and mature in 7 years. The payment of the interest and return of the full $43.2

million in principal upon maturity of all the bonds was dependent on the successful investment

of the proceeds by WAPCC, under the direction of PEM.

85. As set out in the two separate annuity contracts governing the bond issuances to

Hughes and AAM clients (both signed by Dunkerley on WAPCC's behalf and Martin on PEM's

behalf , WAYCC promised that the initial proceeds received would be kept in a "segregated asset

account" that would be "unique to this Contract" and would be "segregated from the Company's

26



other assets." The annuity contract governing the I-Iughes clients' bond proceeds also explicitly

provided that the annuity purchase payment was to be made by wire transfer to "a bank without

any offices and/or branches in the United States" (a provision that was apparently edited out of

the subsequent amluity contract used for the bond issuance sold to the HY Fund).

86. As described above, instead, all of the bond proceeds were sent to the WAPCC

Account in Florida, held in the name of an identically named entity (WAPCC) incorporated and

based in Florida rather than in the BVI, and were never managed by PEM or Martin, in a

separate account or otherwise.

87. In furtherance of the scheme, with Jason Galanis's knowledge, Dunkerley

misappropriated the Tribal Bond proceeds from the WAPCC Account by authorizing wires to a

number of other entities, at least on some occasions doing so based on written instructions he

received from Jason Galanis. For his part, Martin was compensated for his role in funneling the

proceeds to WAPCC through the annuity contract by payments from Galanis-controlled

accounts.

88. Dunkerley wired the largest portion of the proceeds to Thorsdale, an entity Jason

Galanis controlled, from which they were further misappropriated by Jason Galanis for his own

benefit and that of his associates. According to its operating agreement, Thorsdale was

incorporated in Nevada as a "Family Trust Company" for "members of the Berger family and its

Family Affiliates." Berger is the maiden name of Jason Galanis's wife. Jason Galanis had

signing authority over Thorsdale's bank account, held its only debit card, and directed all the

wires that Thorsdale sent that were funded by bond proceeds from the WAPCC Account.

89. The misappropriation of Tribat Bond proceeds by WAPCC and Thorsdale

included the following:

27



1. Payments to Hughes and AAM

90. Morton's decisions to invest Hughes' and AAM's clients' funds in the Tribal

Bonds were driven in part by her expectation that Jason Galanis would continue to arrange

financial backing for the firms. Not only were her expectations met, but they were met by

Hughes' and AAM's receipt of a portion of the very proceeds that WAPCC was supposed to be

investing on behalf of the bond issuer and for the ultimate benefit of Morton's clients.

91. At the direction of Jason Galanis, Hughes and AAM received at least $655,000 of

Tribal Bond proceeds: 1) a $350,000 payment on September 8, 2014, that Jason Galanis had

Dunkerley wire from WAPCC to Thorsdale and then to Valor Group, which then wired it to

Hughes; and 2) a $305,000 payment (matching the amount that Jason Galanis had expressly

promised to Morton the day before she effected the Apri12015 bond purchase by the HY Fund)

that Dunkerley wired to AAM directly from the WAPCC Account on Apri123, 2015.

2. $2,350,000 to John Galanis

92. 1'he closing documents for the sale of the first issuance of Tribal Bonds in August

2014 did not reflect any payments to John Galanis for the work he did in presenting the

transaction to WLCC and securing its participation as issuer. Nor was WLCC informed by John

Galanis, or anyone else, that John Galanis would earn any fees in connection with the Tribal

Bonds, although John Galanis knew that proceeds from the issuance would be directed to him by

his son.

93. Yet, after WAPCC received the bond proceeds in August 2014, all of which it had

received as purchase money for the bogus annuity contract it signed, at Jason Galanis's direction,

Dunkerley sent $2.35 million from WAPCC to an entity controlled by John Galanis called

28



Sovereign Nations Development Corp. From Sovereign Nations Development Corp's bank

account, John Galanis directed several further distributions to another account in his name.

3. Jason Galanis and Dunkerley Misappropriate Millions to Benefit
Jason Galanis, Dunkerley, Hirst, Cooney, Archer and Martin.

94. Jason Galanis arranged to have WAPCC and Thorsdale transfer over $3 million to

lenders and others for the mortgage on and maintenance of his estate in Los Angeles, California.

He also arranged to have money wired from WAPCC and Thorsdale to his criminal defense

attorneys ($497,210) and to his mother, wife and father-in-law (totaling $214,000).

95. In addition, Jason Galanis used his Thorsdale debit card to spend thousands more

at restaurants and luxury retailers such as Valentino, Yves Saint Laurent, Barneys, Prada and

Gucci.

96. Dunkerley, Hirst, Cooney, Archer and Martin all benefited from their

participation in the scheme as well through transfers directed by Jason Galanis out of the

Thorsdale account that they received individually or through entities that they controlled,

including but not limited to: a) $700,513 to Archer between November 2014 and Apri12015; b)

$4,370,000 to Cooney between August 2014 and April 2015; c) $20,485 to Dunkerley in

September 2014; d) $1,300,000 to Hirst in August 2014; and e) $165,000 to Martin between

September 2014 and May 2015.

4. Jason Galanis, Archer and Cooney Recycle Tribal Bond Proceeds to
Acquire New Tribal Bonds for Burnham's Use.

97. In August 2014, the Independent Trustees of an asset manager affiliated with

Burnham Securities sought "iron-clad assurance(s)" from Archer (representing CORFA and

BAM Holdings, LLC) that Jason Galanis would "not be involved with any of the Burnham

entities" or have an "interest of any kind, direct or indirect, in any of the Burnham entities or

►T~



their successors, that he will not source deals to the Burnham entities and that the Burnham

entities will not invest with or in, directly or• indirectly, any business or enterprise in which Mr.

Galanis has any association, affiliation or investment, pecuniary or otherwise, directly or

indirectly." Archer provided the requested assurances to the Independent Trustees via a letter

dated September 26, 2014, but nonetheless continued to significantly involve Jason Galanis in

Burnham's business activities, not only by allowing Jason Galanis to solicit Burnham Securities'

involvement as the private placement agent for the Tribal Bonds and underwriter for at least one

initial public offering, as described below, but also by accepting his direction and guidance on

how to use the Tribal Bonds to benefit Burnham Securities and its affiliates.

98. On October 1, 2014, Jason Galanis used $15 million of the $27 million that

Hughes' clients invested in the August 2014 issuance of the Tribal Bonds to fund the acquisition

of a new $15 million issuance of Tribal Bonds by RSB, an entity wholly owned by Archer. In

other words, instead of having WAPCC invest the first bond issuance's proceeds in an annuity

and assure repayment of the bonds' principal and interest, Jason Galanis used $15 million of

those proceeds to invest in more Tribal Bonds, causing WLCC to issue $15 million more in

obligations even though it was not, in actuality, receiving any additional proceeds to fund an

annuity that would be the only source for repayment of the bonds. The point of this recycling

scheme was to allow Jason Galanis to use the bonds as currency in various transactions,

including to bolster Burnham Securities' net capital.

99. To coordinate Archer's purchase of the $15 million Tribal Bonds, Jason Galanis

arranged for $15 million to be sent from Thorsdale to RSB. RSB then wired $15 million to the

indenture trustee for the benefit of WLCC to purchase the newly issued Tribal Bonds. Most of

the funds received in this issuance were sent again to WAPCC as purchase money supposedly

30



for a new annuity. Prior to receiving these fiends, RSB's account balance was about $2 million.

In the course of paying for the Tribal Bonds, Archer's bank asked him to identify the source of

the funds. Archer facilitated the recycling of the bond proceeds by telling his bank in a client

representation letter he signed on October 20, 2014: "The fiends used to purchase the bonds were

from real estate sales through my business, Rosemont Seneca Bohai LLC," a statement Archer

knew was untrue when he made it.

100. Jason Galanis then recycled a portion of the funds again, this time to fund the

acquisition of a new $5 million issuance of Tribal Bonds by Cooney. Between October 2 and 6,

2014, Dunkerley, at Jason Galanis's direction or with his knowledge, sent back to Thorsdale a

large portion of the funds WAPCC had received from WLCC in connection with the $15 million

sale of Tribal Bonds to RSB. On October 8, 2014, Jason Galanis sent $5 million of the money

that Thorsdale received to Cooney, who used it to purchase Tribal Bonds. By twice recycling a

portion of the proceeds from the initial bond issuance, Jason Galanis and his cohorts caused

WLCC to issue $47 million of Tribal Bonds in exchange for $27 million (minus transaction-

related fees) in proceeds.

101. Archer and Cooney then used their illegitimate Tribal Bonds to benefit Burnham

Securities, an entity in which they each held an ownership interest. In Apri12015, Archer used

RSB's Tribal Bonds to purchase shares of Valor Group with Dunkerley signing the documents

on Valor Group's behalf. In May 2015, one of Valor Group's wholly-owned subsidiaries

transferred $2.6 million of the Tribal Bonds to Burnham Securities to boost its net capital in

order to meet regulatory requirements.

102. Similarly, in May 2015, Cooney transferred his $5 million Tribal Bonds to

Burnham Securities in a transaction devised by Jason Galanis "to get Cooney some reliable

31



income while getting Burnham Net Cap it can commercialize." In an e-mail dated April 24,

2015, to Cooney, Archer and Burnham Financial Group's President, Jason Galanis instructed

them: "if we hustle, we can get the $5 mm on to Burnham's balance sheet this month. This

would require Bevan [Cooney] getting the physical bond delivered to US Bank for transfer into

Burnham's name."

103. Eventually, on May 29, 2015, Cooney directly transferred the $5 million Tribal

Bonds, on Burnham Securities' behalf, to Broker Dealer 1 in partial consideration of Burnham

Securities' purchase of an interest in Broker Dealer 1. Cooney received nothing in exchange

from Burnham Securities for transferring the Tribal Bonds to Broker Dealer 1 on Burnham

Securities' behalf, and no documents evidence the contribution by Cooney as either an

investment in or loan to Burnham Securities. In response to inquiries from FINRA regarding the

specifics of the bonds and Gooney's contribution of them, Jason Galanis told Broker Dealer 1's

President to tell FINRA that Cooney had been an investor in Burnham Securities since 2013 and

"agreed to make afollow-on investment in 2015 in support of Burnham's business plan to

diversify."

5. Jason Galanis, Hirst, Dunkerley and Martin Use Tribal Bond
Proceeds to Support an IPO Underwritten by Burnham.

104. At the direction of Jason Galanis and Hirst, WAPCC used a significant portion of

the proceeds from the sale of the Apri12015 Tribal Bonds to support the successful initial public

offering of Technology Company, in which Jason Galanis, Hirst, Archer, Cooney and Dunkerley

all held shares, and for which Jason Galanis served as an "advisor."

105. In February 2014, Jason Galanis sent Dunkerley the first draft of an S-1 for

Technology Company in connection with a potential discussion regarding "Burnham West

handling the IPO" but asked him to "not distribute to Burnham colleagues until later drafts."

32



Jason Galan~s also told Dunkerley that "Burnham will not be expected to raise any real money,

rather will act as an IPO sponsor." Jason Galanis forwarded the e-rrtail to Archer and Cooney to

include them in his plans.

106. In May 2415, Jason Galanis, Hirst and Martin coordinated the success of

Teclviology Company's IPO, which was underwritten by Burnham Securities, with Dunkerley

taking a lead on the deal. Technology Company's stock was initially offered on the NASDAQ

on May 19, 2015 at $5/share.

107. Between Apri129ih and May 18th, 2015, Dunkerley, acting at Jason Galanis's

direction or with his knowledge, authorized wires totaling $4,336,000 from the WAPCC

Account to two brokerage accounts at Burnham Securities, in the names of IPO Participant 1 and

IPO Participant 2. Both accounts were opened and controlled by Martin, at the direction of

Hirst. Martin knew, or was reckless in not knowing, that the source of the funds for the IPO

Participant 1 and IPO Participant 2 accounts came froze the very proceeds he was supposed to be

managing as an independent Investment Manager and under the terms of the Investment

Management Agreement and Annuity Contract he signed. Under his Investment Management

Agreement, Martin was instructed to purchase a variable annuity "which will provide for

sufficient cash flow to serve [WLCC's] debt" under the Tribal Bonds, not facilitate the

movement of the proceeds into accounts used to buy speculative IPO securities by Hirst or his

entities.

108. IPO Participant 1 and IPO Participant 2, acting through Martin in the Burnham

Securities accounts he had opened, used $4,335,000 of the funds that they received from

WAPCC to purchase 867,000 shares of Technology Company during the IPO. The shares

purchased by Martin in the IPO Participant 1 and IPO Participant 2 accounts represented 87% of

33



the shares offered during Technology Company's TPO. The remaining 13%was also sold to

friendly accounts, including accounts controlled by Hirst.

109. Martin liquidated at least a portion of the Technology Company shares in the IPO

Participant 1 and IPO Participant 2 accounts immediately on the open market at prices ranging

from $14 to $36 per share, above the IPO purchase price of $5 per share. As of October 15,

2015, Martin liquidated 324,120 shares of Technology Company held in the IPO Participant I

and IPO Participant 2 accounts for proceeds of $4,523,312.

110. Despite Martin's profitable trading in the IPO Participant 1 and IPO Participant 2

accounts with money furnished by WAPCC, he knowingly or recklessly disregarded his duties to

WLCC as its independent Investment Manager by failing to direct the full $4.3 million back to

WAPCC. Instead, Martin sent millions of dollars from the IPO Participant 1 and IPO Participant

2 accounts to a variety of Galanis-related transferees, including Jason Galanis's criminal defense

attorneys, Burnham Financial Group and RSB. Martin, himself, also received $145,000 from

IPO Participant 1 and IPO Participant 2.

E. In September 2015, Jason Galanis and Hirst Were Charged and Arrested in a
Separate Matter.

111. In September 2015, the Commission charged Hirst, John Galanis, Jason Galanis,

and two of Jason Galanis's brothers, with defrauding investors in Gerova, whose shares once

traded on the New York Stock Exchange. The USAO filed parallel criminal charges.

112. As a condition of his release on bail pending the resolution of the criminal charges

against him in US v. Galanis, Jason Galanis was required to disclose whether he served as an

officer, director, consultant, advisor or investment banker as to any company. To evade

detection by law enforcement authorities of Jason Galanis's ongoing activities with respect to

I3urnharn Securities, GMT and WAPCC, Martin created a new Internet domain,

34



colarisventures.com, along with the e-mail address, le~al(a~colai•isventures.com, immediately

after Jason Galanis's arrest. Martin agreed to do so even though he knew, or was reckless in not

knowing, that Jason Galanis wanted to set up that separate domain and email address to disguise

his ongoing fraudulent conduct. Using this new e-mail address, and while still released on bail,

Jason Galanis continued to correspond with Dunkerley, Archer, Cooney and others, going so far

as to dictate correspondence Dunkerley should send to third-parties. And he continued to direct

business decisions and transactions, including coordinating an interest payment due on the Tribal

Bonds, as described in the section below.

F. The Aftermath: Jason Galanis, Archer and Dunkerley Continue to Mislead WLCC
and Scramble to Fund WAPCC's Interest Payment Obligations under the Annuity
Contracts

1 ] 3. Pursuant to the annuity contracts in connection with the August and September

2014 issuances of Tribal Bonds, WAPCC was obligated to make respective interest payments in

September 2015 and in October 2015. Since WAPCC had misappropriated the proceeds from

the Tribal Bonds instead o~ investing them in annuities, separately managed by PEM and Martin,

Jason Galanis scrambled to ensure that WAPCC had sufficient funds from other sources to pay

the interest payments that were due in order to protect the Tribal Bond scheme from exposure,

calling on associates far contributions as needed.

114. In September 2015, Dunkerley authorized WAPCC to forward $1.5 million to the

indenture trustee as interest due on the August 2014 bonds. That amount covered the interest

payments due to investors, but failed to cover an additional $277,182.87 in annual income that

WAPCC was obligated to pay WLCC. Based on the sources of funds held in WAPCC's bank

account at the time, the $1.5 million payment that it did make was funded by a small portion of

Technology Company stock sale proceeds it received from IPO Participant 1 and IPO Participant

35



2 ($1.3 million), amounts contributed by Archer ($250,000), and/or amounts received from

another associate of Jason Galanis ($250,000).

115. After he had been arrested, using his new le al ,colarisventures.com e-mail

address, Jason Galanis orchestrated the $1,197,311 interest payment due on the October 2014

Tribal Bonds —bonds that Archer and Cooney had "bought" using recycled proceeds from the

first Tribal Bond issuance, and at least a portion of which Burnham Securities now held after

they had been contributed by Valor Group's subsidiary in May 2015. First, on September 30,

2015, Jason Galanis instructed Dunkerley to tell Burnham Financial Group's President to have

Burnham Financial Group wire $903,000 to the indenture trustee on behalf of WLCC. That

same day, in order to make that payment, Burnham Financial Group received the necessary funds

from awholly-owned subsidiary of Valor Group in a transaction Archer coordinated. The next

day, RSB sent Burnham Financial Group an additional $1,098,000, a poirtion of which Burnham

Financial Group used to send an additional $294,311.11 interest payment to the indenture trustee.

In other words, Burnham Financial Group (through funds provided by Valor Group's subsidiary

and RSB) ended up paying for the interest on the Tribal Bonds that it controlled. But as with the

August 2014 Tribal Bonds, WAPCC failed to make the additional income payment ($250,000)

due to WLCC under the annuity contract.

116. On October 8, 2015, WLCC sent Dunkerley a letter expressing concern regarding

information it had recently learned about Burnham Securities and the ongoing difficulty it was

experiencing in receiving funds due it under the Annuity contracts. In the letter, WLCC

requested that Dunkerley immediately provide valuations on all three annuity contracts.

117. On October 15, 2015, at Jason Galanis's direction or with his knowledge,

Dunkerley responded to WLCC's letter and attached fabricated annual account statements on

36



WAPCC letterhead (reflecting an address in the BVI) for the annuity contracts Martin had

purportedly purchased in connection with the August 2014 and September 2014 Tribal Bonds.

On November 5, 2015, also at Jason Galanis's direction or with his knowledge, Dunkerley

provided a similar fabricated amival account statement for the annuity contract Martin

purportedly purchased in connection with the April 2015 Tribal Bonds. None of the statements

contained any information regarding the underlying investments and each indicated that the

value of the accounts had not changed one penny from the initial amount of money that had

purportedly been invested in the annuities.

118. On February 17, 2016, after the Commission filed its complaint in SEC v. AAM,

Jason Galanis sent WLCC a letter to rebut the Commission's allegations and to assure WLCC of

the Tribal Bonds' validity and WAPCC's appropriate investment of the bonds' proceeds. In the

letter, Jason Galanis pointed to the timely payment of interest on the bonds as evidence of their

legitimacy, noting, "WLCC bond interest of over $2.72 million was already paid by these

distributions precisely as contemplated in the Indenture and related agreement," and falsely

stated: "These annuity distributions will continue from the assets owned in the annuities.

Therefore, the WLCC bonds will continue to be paid." Among other things, Jason Galanis

concealed the fact that the two interest payments had been funded by sources other than annuity

investments.

119. More recently, and with an interest payment due date for the Apri12015 bond

issuance fast approaching, Jason Galanis changed tacks. In an April 4, 20161etter to WLCC,

Dunkerley, writing on behalf of WAPCC, declared that WAPCC had suspended its interest

payments on the Tribal Bonds. In his letter, written at the direction or with the knowledge of

Jason Galanis, Dunkerley notified WLCC that WAPCC would "withhold Annuity distribution

37



payment to WLCC until such time as WLCC provides a satisfactory financial surety" to

indemnify WAPCC for the costs it and its "agents" incurred in defense of the Commission's

investigation, among other matters.

G. The Commission's Action Against AAM

120. On December• 15, 2015, the Commission filed an emergency action charging

AAM with investment adviser fraud for investing over $43 million in Tribal Bonds without

disclosing the conflicts of interest inherent in the transactions arising from the benefits the bond

sales generated for entities related to AAM's parent company and financiers. The Commission

obtained a TRO appointing a monitor to oversee AAM, in order to protect AAM's clients from

further inappropriate investments.

121. On January 8, 2016, based on concerns identified by the Court-appointed monitor,

the Commission obtained an order expanding the monitor's powers to that of a receiver. The

receiver is in the process of winding down the company. By consent of the receiver, the

Commission has obtained a bifurcated judgment as to liability against AAM.

FIRST CLAIM FOR RELIEF
Violations of and Aiding and Abetting Violations of Section 17(x)(1) and (3) of the

Securities Act
(Against Jason Galanis, Archer, Cooney, Dunkerley, John Galanis, Hirst and Martin)

122. The Commission realleges and incorporates by reference herein each and every

allegation contained in paragraphs 1 - 121.

123. Jason Galanis, Archer, Cooney, Dunkerley, John Galanis, Hirst and Martin each,

directly or indirectly, singly or in concert with others, by use of the means or instruments of

transportation or communication in interstate commerce or by use of the mails in the offer or sale

of securities, with scienter, employed devices, schemes or artifices to defraud or engaged in

ft~:3



transactions, practices or courses of business which operated or would operate as a fraud or

deceit upon a purchaser.

124. By virtue of the foregoing, Jason Galanis, Archer, Cooney, Dunkerley, John

Galanis, Hirst and Martin each, directly or indirectly, violated, and unless restrained and

enjoined, will continue violating, Sections 17(a)(1) and (3) of the Securities Act [15 U.S .C. §§

77q(a)(1) and (3)].

125. In the alternative, Archer, Cooney, Dunkerley, John Galanis, Hirst and Martin

each, directly or indirectly, knowingly or recklessly provided substantial assistance to Jason

Galanis, who, directly or indirectly, singly or in concert with others, in the offer or sale of a

security, with scienter, used the means or instruments of transportation or communication in

interstate commerce or used the mails to employ devices, schemes or artifices to defraud or to

engage in transactions, practices or courses of business which operated or would operate as a

fraud or deceit upon a purchaser.

126. By virtue of the foregoing, Archer, Cooney, Dunkerley, John Galanis, Hirst and

Martin aided and abetted, and unless restrained and enjoined, will continue aiding and abetting,

violations of Sections 17(a)(1) and (3) of the Securities Act [15 U.S.C. §§ 77q(a)(1) and (3)] in

violation of Section 15(b) of the Securities Act [15 U.S.C. § 77o(b)].

SrCOND CLAIM FOR RELIEF
Violations of and Aiding and Abetting Violations of Section 10(b) of the Exchange Act

and Rules lOb-5(a), (b) and (c) Thereunder
(Against Jason Galanis, Archer, Cooney, Dunkerley, John Galanis, Hirst, Morton and

Martin)

127. The Commission realleges and incorporates by reference herein each and every

allegation contained in paragraphs 1 — 121.

39



128. Jason Galanis, Archer, Cooney, Dunkerley, John Galanis, Hirst, Morton and

Martin each directly or• indirectly, singly or in concert with others, in connection with the

purchase ox sale of a security, with scientex, used the means or• instrume~italities of interstate

commerce or of the mails ox of a facility of a national securities exchange to ennploy devices,

schemes, ox aa-tifices to defraud; and to engage in acts, practices, or courses of business which

operated or would operate as a fraud or deceit upon others.

129. By virtue of the foregoing, Jason Galanis, Archer, Cooney, Dunkerley, John

Galanis, Hirst, Morton and Martin each violated, and unless restrained and enjoined, will

continue violating, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules l Ob-5(a)

and (c) [17 C.F.R.§§ 240.1Qb-5(a) and (c)].

130. Morton directly or• indirectly, singly or in concert with others, in connection with

the purchase or sale of a security, with scienter, used the means or instrumentalities of interstate

commerce ox of the mails or of a facility of a national securities exchange to make an untrue

statement of a material fact or to omit to state a material fact necessary in order to make the

statements made, in the light of the circumstances under wlaich they were made, not misleading.

131. By virtue of the foregoing, Morton violated, and unless restrained and enjoined,

will continue violating, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules l Ob-

5(b) [1? C.F.R. § 240.1Ob-5(b)J.

l 32. In the alternative, Archer, Cooney, Dunkerley, John Galanis, Hirst and Martin

each directly or indirectly, provided knowing and substantial assistance to Jason Galanis, who,

directly or indirectly, singly or in concert with others, in connection with the purchase ox sale of

a security, with scienter, used the means or instrumentalities of interstate commerce or of the

mails or of a facility of a national securities exchange to employ devices, schemes, or artifices to

1,defraud; and to engage in acts, practices, or courses of business which operated or would operate

as a fraud or deceit upon others.

133. By virtue of the faregoing, Archer, Cooney, Dunkerley, John Galanis, Hirst and

Martin each aided and abetted, and unless restrained and enjoined, will continue aiding and

abetting, violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rules lOb-

5(a) and (c) thereunder [17 C.F.R.§§ 240.1Ob-5(a) and (c) ] in violation of Section 20(e) of the

Exchange Act [15 U.S.C. § 78t(e)].

THIRD CLAIM FOR RELIEF
Violations of Sections 206(11, 206(21 and 206(4) of the Advisers Act, and Rule 206(4)-8

thereunder
(Against Morton)

134. The Commission realleges and incorporates by reference herein each and every

allegation contained in paragraphs 1 - 121.

135. Morton, while acting as an investment adviser, by use of the mails, or the means

and instrumentalities of interstate commerce, directly or indirectly, singly or in concert with

others: (a) employed devices, schemes,. or artifices to defraud her clients or prospective clients

with scienter; and (b) knowingly, recklessly or negligently engaged in transactions, practices,

and courses of business which operated as a fraud or deceit upon her clients or prospective

clients.

136. Morton, while acting as an investment adviser to a pooled investment vehicle, (a)

made untrue statements of material fact or omitted to state a material fact, necessary to make the

statements made, in the light of tl~e circumstances under which they were made, not misleading,

to an investor in t ie pooled investment vehicle; and (b) engaged in acts, practices, or courses of

business that were fraudulent, deceptive, or manipulative with respect to an investor or

prospective investor in the pooled investment vehicle.

41



137. By virtue of the foregoing, Morton violated, and unless restrained and enjoined,

will continue violating, Sections 206(1), (2) and (4) of the Advisers Act [IS U.S.C. §§ 80b-6(1),

(2) and (4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].

FOURTH CLAIM FOR RELIEF
Aiding and Abetting Violations of Sections 206(1), 206(2) and 206(4) of the Advisers Act

and Rule 206(4)-8 Thereunder
(Against Morton)

138. The Commission realleges and incorporates by reference herein each and every

allegation contained in paragraphs 1 - 121.

139. Morton, directly or indirectly, knowingly or recklessly provided substantial

assistance to Hughes and AAM, which, while acting as investment advisers, by use of the mails,

and the means and instrumentalities of interstate commerce, directly or indirectly, singly or in

concert with others: (a) employed devices, schemes, or artifices to defraud their respective

clients or prospective clients with scienter; and (b) knowingly, recklessly or negligently engaged

in transactions, practices, and courses of business which operated as a fraud or deceit upon their

respective clients or prospective clients.

140. Morton, directly or indirectly, knowingly or recklessly provided substantial

assistance to AAM which, while acting as an investment adviser to a pooled investment vehicle,

(a) made untrue statements of material fact or omitted to state a material fact necessary to make

the statements made, in the light of circumstances under which they were made, not misleading,

to an investor in the pooled investment vehicle; and (b) engaged in acts, practices, or courses of

business that were fraudulent, deceptive, or manipulative with respect to an investor or

prospective investor in the pooled investment vehicle.

141. By virtue of the foregoing, Morton aided and abetted, and unless restrained and

enjoined, will continue aiding and abetting, violations of Sections 206(1), (2) and (4) of the

42



Advisers Act [15 U.S.C. §.§ 80b-6(1), (2) and (4)], axed Rule 206(4)-8 thereunder [17 C.F.R. §

275.206(4)-8], in vio~latior~ of Section 209(fl of the Advisers Act [15 U.S.0 . § 80b-9(f~].

PRAYER FOR RELIEF

WHEREFORE, the Commission respectfully requests that the Court enter a Final

.TL1Ci~ri1~11t:

I.

Permanently restraining and enjoining Jason Galanis, Archer, Cooney, Dunkerley, John

Galanis, Hirst and Martin, their agents, servants, employees and attorneys and all persons in

active concert or participation with them who receive actual notice of the injunction by personal

service or otherwise, and each of them, from violating, directly or indirectly, Sections 17(a)(1)

and (3) of the Securities Act [15 U.S .C. §§ 77q(a)(1) and (3)];

II.

Permanently restraining and enjoining Zason Galanis, Archer, Cooney, Dunkerley, John

Galanis, Hirst and Martin, their agents, servants, employees and attorneys and all persons in

active concert or participation with them who receive actual notice of the injunction by personal

service or ofiherwise, and each of them, from violating, directly or indirectly, Section 10(b) of

the Exchange Act [15 U.S.C. § ?8j(b)] and Rules lOb-5(a) and (c) [17 C.F.R.§§ 240.1Ob-5(a)

and (c)];

III.

Permanently restraining and enjoining Morton, her agents, servants, employees and

attorneys and all persons in active concert or participation with them who receive actual notice

of the injunction by personal service or otherwise, and each of them, from violating, directly or

indirectly,. Section 1Q(b~, of the Exchan~~ Act [~ 5 U.S.C. ~. 78j,(b)], and Rules lOb-5(a),~(b) and

43



(c) thereunder [17 C.F.R.§~ 240.1Ob-5(a), (b) and (c)] and Sections 206(1), (2) and (4) of the

Advisers Act [15 U.S.C. §§ 80b-6(1), (2) and (4)] and Rule 206(4)-8 thereunder [17 C.F.R. §

275.206(4)-8];

IV.

Permanently barring Jason Galanis, Archer and Dunkerley from acting as an officer or

director of a public company pursuant to Section 20(e) of the Securities Act [15 U.S.C. § 77t(e)]

and Section 21(d)(2) of the Exchange Act [ 15 U.S.C. § 78u(d)(2)J; and permanently barring

Morton from acting as an officer or director of a public company pursuant to Section 21(d)(2) of

the Exchange Act [15 U.S.C. § 78u(d)(2)];

V.

Directing each of the Defendants to disgorge all ill-gotten gains, plus prejudgment

interest thereon;

U~

Directing Jason Galanis, Archer, Cooney, Dunkerley, John Galanis, Hirst and Martin to

pay civil money penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)];

VII.

Directing Jason Galanis, Archer, Cooney, Dunkerley, John Galanis, Hirst, Morton and

Martin to pay civil money penalties pursuant to Section 21(d)(3) ofthe Exchange Act [15 U.S.C.

78u(d)(3)];

VIII.

Directing Morton to pay civil money penalties pursuant to Section 209(e) of the Advisers

Act [15 U.S.C. § 80b-9(e)]; and

,~



IX.

Granting such other and further relief as this Court deems just and appropriate.

JURY DEMAND

Pursuant to Rule 38 of the Federal Rules of Civil Procedure, Plaintiff demands that this

case be tried to a jury.

Dated: New York, New York
November ~, 2016

By:

Andrew M. Calamari
Sanjay Wadhwa
Adam S. Grace
Nancy A. Brown
Tejal D. Shah
I-I. Gregory Baker
Attorneys for the Plaintiff
SECURITIES AND EXCHANGE

COMMISSION
New York Regional Office
Brookfield Place
200 Vesey Street, Suite 400
New York, New York 10281
(212) 336-1023 (Brown)
Email: brownN ,,sec.gov

45