U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23352 / September 17, 2015
Securities and Exchange Commission v. Christopher J. Hall, Civil Action No. 1:15-cv-23489-CMA (S.D. Fla., filed September 17, 2015)
The Securities and Exchange Commission today charged the former chairman of a public company that operated a horse racetrack for fraudulently obtaining millions of dollars in loans from a brokerage firm.
The SEC filed a complaint in federal court in Miami against Christopher J. Hall, who was formerly chairman of the board of Call Now, Inc., a now-defunct Texas company that operated the racetrack. From 1999 to 2008, Hall obtained tens of millions of dollars in margin loans from brokerage firm Penson Financial Services mainly to purchase municipal bonds and to fund the racetrack's operating expenses. When the collateral underlying Hall's margin loans plummeted in value in the wake of the financial crisis, Hall pledged additional collateral to support his debts in response to Penson's demands. The SEC alleges that Hall lied about the status of his additional collateral while fraudulently obtaining $6.8 million in additional loans or credit from Penson.
The SEC's complaint against Hall alleges that he violated Section 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The SEC's complaint seeks disgorgement of ill-gotten gains plus interest, penalties, an officer-and-director bar, and a permanent injunction against Hall.