SEC Sues Investment Advisor Desla U. Thomas in Investment Scheme

SEC v. Desla U. Thomas, et al., Case No. 3:13-cv-00739-L (N.D. Tex.).  On February 15, 2013, the SEC announced fraud charges against investment adviser Delsa U. Thomas, The D. Christopher Capital Group, LLC (“DCCMG”), and The Solomon Fund LP.  The SEC’s complaint alleges that Thomas guaranteed that $1 million in investor money would be safely invested in U.S. Treasury securities and would generate more than 600 percent in profits within 35 banking days.  Although Thomas purchased U.S. Treasury securities, she got additional money by margining the securities and then commingled the proceeds with investor funds.  Thomas did not disclose any of this.  In addition, Thomas used newer investor money to make Ponzi payments to earlier investors and also used investor money to cover personal expenses.  Lastly, the SEC alleges that DCCMG was improperly registered with the Commission as an investment adviser, and that Thomas aided and abetted that violation.  The SEC charged Thomas, DCCMG, and the Solomon Fund with violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5.  The complaint also charges Thomas and DCCMG with violating Sections 206(1), (2), and (4) of the Investment Advisers Act and Rule 206(4)-8 thereunder. Finally, the complaint alleges that DCCMG violated Section 203A of the Advisers Act and that Thomas aided and abetted this violation. The SEC is seeking injunctive relief, disgorgement plus prejudgment interest, and civil monetary penalties.

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