Tag: SEC

Bankr. M.D.N.C.: In re Gilley- Dischargablity of SEC Settlements under 11 U.S.C. § 523(a)(19)

Summary:

The SEC filed a complaint against the Debtor and two other individuals in 2005 alleging they had engaged in a $60 million Ponzi scheme, specifically alleging that the Debtor unlawfully sold unregistered securities, was not registered as a broker-dealer when selling certain billboards, and failed to disclose material information to investors. In 2006, the Debtor and the SEC filed a consent judgment wherein the Debtor agreed to, among other terms, disgorge nearly $2 million. In 2008, the district court imposed a $5,000 civil penalty against the Debtor as his “violations were not particularly reprehensible or egregious.”

After filing bankruptcy, the Debtor brought an adversary proceeding seeking a determination that the $2 million was dischargeable, as he had neither admitted nor denied the allegations of fraud made by the SEC.… Read More

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