Securities And Exchange Commission v. Aubrey Lee Price; PFG, LLC; PFGBI, LLC; Montgomery Asset Management, LLC f/k/a PFG Asset Management, LLC, (Florida limited liability company); and Montgomery Asset Management, LLC f/k/a PFG Asset Management, LLC, (Georgia limited liability company), Case No. 1:12-CV-2296 (N.D. Ga.).  On July 2, 2012 the SEC obtained a court order to freeze the assets of Aubrey Lee Price, a Georgia-based investment adviser who is responsible for $40 million of investment fraud.  Price is apparently in hiding after allegations of raising money from more than 100 investors in Georgia and Florida by selling shares in an unregistered investment fund (PFG).

Between 2009 and the filing of the SEC’s action, Price and the other defendants, which he controlled, raised approximately $40 million from approximately 115 investors, located primarily in Georgia and Florida, through the sale of membership interests in PFG and PFGBI, which were unregistered investment funds (the “Funds”).  PFGBI was created as a separate investment vehicle for a subset of PFG investors to take existing PFG funds and invest those funds in a troubled local bank.  Although created as separate entities, there was extensive intermingling of corporate forms, roles and statements between PFG, PFGBI, Montgomery Asset Investment Adviser and Montgomery Asset Managing Member, showing a concerted scheme all masterminded by Price.  PFG’s offering documents represented that investor funds would be kept in a custodial account at Goldman Sachs Execution & Clearing, L.P. (“Goldman Sachs”), and a significant portion of PFG investor funds were placed in a securities trading account at Goldman Sachs. The account suffered massive trading losses.  Additionally, contrary to the representations made in the offering documents that the funds would remain in an account at Goldman Sachs, there were frequent large wires transferred out of the account, often to PFG’s operating account at Bank of America, N.A.  Throughout the time during which PFG was suffering trading losses, client account statements maintained by PFG and prepared by Price were made available to investors indicating fictitious investment returns.  Neither Price nor PFG have notified investors that PFG has closed its account at Goldman Sachs. Moreover, neither Price nor PFG have notified investors of the minimal funds remaining in PFG’s other accounts. 

Defendants are charged with violating Section 10(b) of the Exchange Act and Rules 10b-5(a), (b) and (c) thereunder, Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act and Rule 206(4)-8 thereunder.