U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23607 / July 28, 2016
Securities and Exchange Commission v. Matthew White et al., No. 1:16-cv-2715-WSD (N.D. Ga. Filed July 27, 2016)
SEC Obtains Asset Freeze in Case of Investor Funds Stolen for Shopping Sprees
The Securities and Exchange Commission today announced an asset freeze it has obtained against three men who aren't registered to sell investments and allegedly went on lavish shopping sprees with more than $5 million raised from investors to purportedly develop a resort.
In an emergency action filed in federal court in Atlanta, the SEC alleges that Matthew E. White, Rodney A. Zehner, and Daniel J. Merandi fraudulently issued $1 billion in unsecured corporate bonds out of a shell company they own and claimed the money would be used to fund the resort project. But they never came close to raising the funds necessary to start the project, and meantime they pocketed the $5.6 million they did raise and used it for personal purchases at Saks Fifth Avenue, Gucci, Louis Vuitton, Prada, and Versace.
The SEC's complaint filed yesterday alleges that White, Zehner, Merandi, and their companies violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-5. The SEC seeks permanent injunctions, disgorgement, and penalties against all of the defendants. The court order obtained late yesterday freezes defendants' cash held in a brokerage account and freezes the bonds held in a separate brokerage account.
The SEC's investigation was conducted by Debbie Hampton, Tony Winter, and Harry Roback, and supervised by Matthew McNamara and William Hicks of the Atlanta office.