Court Enters Default Judgment Against James Erwin and Malom Group
The Securities and Exchange Commission (SEC) announced on October 8, 2015 that the United States District Court for the District of Nevada entered default judgments against Las Vegas-based James Erwin and his corporate entity, Las Vegas-based Joint Venture Solutions, Inc., for violating the securities offering and broker-dealer registration provisions of the federal securities laws when they promoted a fictitious prime bank investment scheme. The Court granted the SEC’s request for permanent injunctions against Erwin and Joint Venture Solutions, held them jointly and individually responsible for disgorgement of illicit earnings and ordered them to pay civil penalties.
The SEC’s complaint alleged that Erwin and Joint Venture Solutions violated the securities offering and broker-dealer registration provisions of the federal securities laws by promoting investments in Malom Group AG, a Switzerland based a company named with an acronym for “Make A Lot Of Money.” The SEC claimed that Malom and its principals, who were separately charged in a related action, were behind a pair of advance fee schemes guaranteeing astronomical returns to investors in purported prime bank transactions and overseas debt instruments. The SEC’s complaint also alleged that between 2009 and 2011 Erwin, through Joint Venture Solutions, promoted investments in Malom, offered Malom’s securities to prospective investors, and acted as an intermediary between investors and Malom. Ultimately, the defendants’ efforts induced at least five investors to pay Malom over $2.5 million to enter into agreements with Malom. The SEC claimed that while the Erwin and his company received pay based upon a percentage of the amount of investor capital raised, the investors they recruited lost all of their invested funds.
Although the defendants answered the SEC’s complaint and responded to discovery, their counsel withdrew after being served with the SEC’s motion for summary judgment, which detailed the extensive evidence against Erwin and Joint Venture Solutions. On June 29, 2015, after defendants failed to respond to several Court orders, the Court struck the defendants’ answer, entered default against them, and granted the SEC’s motion for summary judgment as to both liability and remedies. The Court entered a final judgment on July 7, 2015. The Court granted the following relief against Erwin and Joint Venture Solutions: (1) permanent injunctions against future violations of the securities laws they violated; (2) permanent injunctions prohibiting them from participating in the issue, offer, or sale of any security, with the exception of purchases or sales made on a national securities exchange; (3) an order to disgorge, jointly and severally, $129,975 in ill-gotten gains together with prejudgment interest of $16,512.82, for total disgorgement of $146,487.82; and (4) an order that each of them pay a civil penalty of $146,487.82
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit www.securitieslawyer101.com. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855