Last week, the SEC prevailed in its first federal court trial of FY 2016. The SEC announced that following a bench trial in SEC v. National Note of Utah and Wayne L. Palmer, U.S. District Court Judge ordered Palmer to pay disgorgement of $1,767,287.10 and for National Note to disgorge $65,188,155.83. The Court also imposed civil penalties of $1,050,000 and $900,000 against Palmer and National Note, respectively. An SEC spokesperson confirmed that the SEC won on all counts.
The SEC alleged in a lawsuit filed in 2012 that Palmer and National Note engaged in a Ponzi scheme in which it
promised more than 600 investors a guaranteed 12% annual return and assured them their money was completely secured and being used to make hard money loans, purchase notes, and acquire real estate. In reality, Palmer deposited investor funds in one bank account titled "investor trust account," wired the funds to a second bank account titled "investor interest account," and then used the funds to pay returns to other investors.
Following this victory, the SEC is now 1-0 in its FY 2016 federal court trials. To recap, the SEC was undefeated in its six FY 2015 federal court trials (posting a record of 4-0-2) and had a record of 5-7-5 in its 17 FY 2014 federal court trials.