SEC Litigation Release: Florida Jury Broker-Dealer Liable In Securities Fraud Case
On July 30th, 2021, the Securities and Exchange Commission (SEC) announced that a Florida jury found Spartan Securities Group, LTD., another firm, and two individuals legally liable in a securities fraud case (Litigation Release No. 25156). The court will not be tasked with determining the appropriate sanctions/penalties. In this blog post, our Miami investment fraud attorneys discuss the latest developments in this case.
Allegations: Florida-Based Broker-Dealer Spartan Securities Group Facilitated Fraud
Spartan Securities Group, LTD. is a formerly registered brokerage firm. Established in Florida, the broker-dealer entered the securities industry in 2000. In June of 2019, its securities license was cancelled by the Financial Industry Regulatory Authority (FINRA) following allegations of misconduct.
The regulatory action from FINRA came after the SEC filed a securities fraud charge against Spartan Securities Group and two of its principal agents, Carl E. Dilley and Micah J. Eldred. The SEC alleged that Spartan improperly set up nearly two dozen “shell” companies for another firm in violation of securities laws.
Jury Verdict: Spartan Securities Group and Two Principals Made Made Misrepresentation
The SEC filed a civil claim against Spartan Securities Group, Mr. Dilley, and Mr. Eldred in the United States District Court for the Middle District of Florida. Following a multi-week trial, the jury came back with a unanimous guilty verdict against all three parties, as well as the other company—Island Capital Management.
According to the findings of the jury, Spartan Securities Group, Mr. Dilley, and Mr. Eldred made material misrepresentations when filling out required FINRA paperwork, including Form 15c2-11. By doing so, the firm and its two principals facilitated penny stock fraud and put innocent investors at significant risk.
The Florida Court Must Determine the Proper Penalties
In returning a verdict in favor of the Securities and Exchange Commission, the jury has found that Spartan Securities Group, Carl E. Dilley, and Micah J. Eldred are legally liable for certain violations of federal securities law and FINRA regulations. It is now up to the Florida court to determine the appropriate sanctions against each party. For its part, the SEC is seeking the following penalties:
- Spartan Securities Group: A permanent injunction, a bar from engaging in penny stock, and civil financial penalties.
- Carl E. Dilley: A permanent injunction, a bar from engaging in penny stock, civil financial penalties, and disgorgement of any ill-gotten gains.
- Micah J. Eldred: A permanent injunction, a bar from engaging in penny stock, civil financial penalties, and disgorgement of any ill-gotten gains.
Schedule a Confidential Case Evaluation With a South Florida Investment Fraud Lawyer
At Carlson & Associates, P.A., we are strong, results-focused advocates for investors. Our lawyers know how to get your point across. If you or someone you know lost money due to broker-dealer fraud or financial advisor misconduct, we can help. Call us now for a completely confidential review and evaluation of your case. With a legal office in the heart of Miami, our law firm provides securities fraud representation throughout South Florida.
Resource:
sec.gov/litigation/litreleases/2021/lr25156.htm