SEC v. Robert A. Gist et al., Case No. 1:13-cv-01833 AT. On May 31, 2013, the SEC announced it charged attorney Robert A. Gist and Gist, Kennedy & Associates, Inc. (“Gist Kennedy”), a company that Gist controls, with defrauding investors out of at least $5.4 million. The SEC alleges that Gist obtained the money from investors by falsely promising that he would invest their funds conservatively in corporate bonds and other securities. According to the SEC, Gist did not invest money and instead used investor funds to pay for personal expenses, to pay purported dividends, and to fund the operation of a company that he controlled. According to the SEC, Gist hid his fraud by providing clients with fictitious account statements. Without admitting or denying the charges, Gist and Gist Kennedy agreed to settle the case against them. They consented to the entry of an order permanently enjoining them from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and permanently enjoining Gist from future violations of Section 15(a) of the Exchange Act. Defendants will also pay $5.4 million in disgorgement plus prejudgment interest. The amount of civil monetary penalties will be determined by the Court at a later date upon motion of the Commission.
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