SEC Obtains Contempt Order in 30-Year Old Case

SEC v. James L. Douglas a/k/a James Cooper, Case No. 82-cv-29 (N.D. Ohio).  After being criticized a few years ago about not being aggressive enough about going after defendants who do not pay their penalties, the SEC shows it is willing to pursue a defendant 30 years after the case was originally filed.  On October 12, 2012, the SEC announced it obtained a contempt order against James L. Douglas a/k/a James Cooper.  The SEC sued Douglas in 1982 in connection with a $7.5 million offering fraud.  Douglas settled in 1983 and was ordered to disgorge $200,000.  He only paid a little more than half of what he owed.  His lawyer at the time said Douglas may have moved to Scotland.   

Based on the non-payment, the SEC prevailed on a motion for contempt in 1988 and an arrest warrant was issued.  The warrant was never executed because the U.S. Marshals could not find Douglas.  In 2010, the SEC learned that Douglas was in the U.S.  They also learned he obtained $2.5 million after he sued some tobacco companies on behalf of his deceased wife’s estate.  The verdict is currently on appeal.

In January, 2012, the SEC filed a second motion to hold Douglas in contempt.  After a lengthy evidentiary hearing, the court ruled in the SEC’s favor.  The Court also ruled that under the relevant statute, Douglas has to pay the statutory interest rate of 10.74% from the date of the judgment in 1983.  The interest exceeds $1.7 million.

This entry was posted in Securities and tagged , . Bookmark the permalink.