(February 14- 17:10 ET) – The U.S. Securities and Exchange Commission reports that it has obtained default judgments against TAC International Ltd., its former president and owner, Douglas Walker, and its current president and owner, Craig Southwood. The judgments stem from a civil action involving the sale of fraudulent “prime bank” securities, which duped investors out of millions of dollars.

The Ontario Securities Commission also has a case against TAC, Walker, David Drennan, Steven Peck, Don Gutoski, Ray Ricks, Al Johnson and Gerald McLeod in Ontario Provincial Offences Court on similar accusations.

The SEC says chief U.S. District Judge Graham Mullen of the U.S. District Court for the Western District of North Carolina found that TAC, Southwood and Walker violated the antifraud provisions of the federal securities laws.

Mullen enjoined the defendants from future violations, ordered them to disgorge approximately US$10.9 million, imposed civil monetary penalties against them of US$770,000, and ordered them to produce a written, specific accounting of all proceeds obtained by them as a result of their conduct. Mullen also entered a final judgment against Jan Harry “Jack” Wilde, formerly one of TAC’s national vice presidents, enjoining Wilde from future violations.

The SEC alleged that from the summer of 1996 until August of 1997, TAC, a Bahamas corporation, and its senior officers, represented that by buying a Bahamian International Business Corp., investors could participate in certain securities trading programs. The programs supposedly enabled investors to obtain phenomenal returns, at no risk to principal, by participating in purported trading in high yield debentures between and among banks.

The complaint alleged that the defendants did not engage in any trading, but instead used the money they procured from investors to pay for their lifestyles and personal expenses. According to the complaint, the defendants defrauded thousands of U.S. residents, who each entrusted the defendants with investments of at least US$1,500 each.

Wilde consented, without admitting or denying the allegations of the complaint, to the entry of a final judgment permanently enjoining him, waiving disgorgement and declining to impose a civil monetary penalty based on his demonstrated inability to pay. TAC, Southwood, Walker and Wilde were the only remaining defendants.
-IE Staff