U.S. securities regulators have charged a Canadian man with alleged securities law violations in connection with an unregistered $163 million offering.
The U.S. Securities and Exchange Commission (SEC) charged Derek F.C. Elliott of Toronto, and a Nevada resident, James Catledge, and certain related entities, with making material misrepresentations to investors amid the unregistered sale of interests in two resorts in the Dominican Republic.
The SEC alleges that the pair raised more than $163 million from approximately 1,200 investors between the fall of 2004 and 2009 through timeshare and ownership interests in two Dominican resorts. It claims that they promised investors secure returns, but that rather than constructing the properties the funds were largely used for other purposes, including $59 million in undisclosed commissions, and paying returns to earlier investors. The allegations have not been proven.
The regulator is seeking disgorgement of ill-gotten gains, financial penalties, and permanent injunctive relief against the pair, along with Sun Village Juan Dolio, Inc., EMI Sun Village, Inc. and EMI Resorts (S.V.G.), Inc. It also seeks an injunction against the men from acting as unregistered broker-dealers.