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International Law

: Misleading Advertising Law

Coadum Advisors Court Order

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Coadum Advisors, Inc.; Mansell Capital Partners III, LLC; James A. Jeffery; Thomas E. Repke; Coadum Capital Fund 1, LLC; Coadum Capital Fund II, LP; Coadum Capital Fund III, LP; and Mansell Acquisition Company LP: "Court Order in Coadum Action"

The court ordered the defendants to pay disgorgement, prejudgment interest and civil penalties in amounts to be resolved upon motion of the Commission at a later date, and directed that for purposes of that motion, the allegations of the Commission's Complaint shall be deemed true. The court further ordered that, pending determination of the remaining issues of disgorgement, prejudgment interest and civil penalties, the defendants' assets remain frozen. The court ordered the continuance of the Receiver of Coadum, Mansell, Coadum 1, Coadum II, Coadum III and MAC. The defendants consented to the order without admitting or denying any of the allegations of the Commission's Complaint.

The Complaint alleged that the defendants engaged in fraud in conjunction with a series of four securities offerings which began in early 2006. Jeffery of Ontario, Canada and Repke of Holladay, Utah, controlled the entities and directed the offerings. The Complaint further alleged that, as a result of the fraudulent scheme, approximately $30 million was raised from at least 150 investors. The Complaint alleged that the defendants falsely represented to investors that they would receive a return of from 3 to 6% per month; misrepresented that their principal was protected; and failed to disclose that the defendants have made loans to themselves from the investor proceeds. Furthermore, the Complaint alleged that the defendants falsely represented in monthly account statements to investors that they have earned approximately 4% per month, and that all or most of their principal was in escrow. Finally, the Complaint alleged that, without disclosure to investors, Coadum and Mansell have also "borrowed" in excess of $3 million of, or against, the investors' funds and have disbursed approximately $5 million to related parties.

(Via SEC.gov Updates: Litigation Releases.)

Full post as published by Misleading Advertising Law on February 04, 2008 (boomark / email).