SEC Brings Fraud Charges in “Prime Bank Scheme”

November 29, 2010

The SEC filed a civil action against Jennifer Dodge, Grant Carroll, Tamara Davis, and The Cornerstone TKD, LLC.


The SEC alleges that, from April 2007 to May 2008, the group raised approximately $9 million from 20 investors by selling unregistered, high-yield interests in a “Prime Bank” scheme through the now-defunct company, Quantum Funding Strategies, LLC.  The SEC noted that “Prime Bank” schemes lure investors with the promise of astronomical profits and the chance to be a part of an exclusive, international investing program.

The SEC alleges that investors were told that their funds would be pooled and placed with an escrow agent and then used to secure money from high-net worth "funders."  That money would be held in a "blocked funds account" and would be used as collateral for "traders" to buy and sell bank notes and other instruments.  The SEC further alleges that investors never earned any returns because the group never completed the promised transactions.  The SEC seeks disgorgement from Dodge and Carroll, and injunctive relief and civil money penalties from all the persons.

Click here to access the administrative action.


Categories

Enforcement Actions, Investment Advisers