Erez Law is investigating claims regarding claims regarding AIC promissory notes and stock. In a 2011 complaint filed by the SEC against AIC, Inc., Community Bankers Securities, LLC, and Nicholas D. Skaltsounis, the SEC alleged that Skaltsounis devised and orchestrated an offering fraud by offering and selling millions of dollars of AIC promissory notes and stock. The scheme occurred from at least January 2006 through November 2009, when Skaltsounis, directly and through registered representatives associated with Community Bankers Securities, offered and sold AIC promissory notes and stock to numerous investors across multiple states, many of whom were elderly, unsophisticated brokerage customers of CB Securities. The SEC argued that Defendants misrepresented and omitted material information to investors relating to, among other things, the safety and risk associated with the investments, the rates of return on the investments, and how AIC would use the proceeds of the investments. AIC and its subsidiaries were never profitable, and Defendants used money raised from new investors to pay back principal and returns to existing investors. On October 10, 2013, a jury in Knoxville, Tennessee, returned a verdict against Defendants AIC, Community Bankers Securities, and Skaltsounis, after a nearly three-week-long trial.
In the final judgments issued on August 1, 2014, the Court ordered substantial relief in favor of the SEC, including permanent injunctions against AIC, Community Bankers Securities, and Skaltsounis, monetary judgments, in the form of disgorgement, prejudgment interest, and third tier civil penalties. In particular, the Court ordered as follows:
- AIC: disgorgement of $6,647,540, plus prejudgment interest of $969,262.10, and a civil penalty of $27,950,000, for a total of $35,566,802.10.
- Community Bankers Securities: disgorgement of $2,830,946, plus prejudgment interest of $412,773.53, and a civil penalty of $27,950,000, for a total of $31,193,719.53.
- Skaltsounis: disgorgement of $948,389.13, plus prejudgment interest of $138,282.35, and a civil penalty of $1,505,000, for a total of $2,591,671.48.
The Court further ordered that Relief Defendants Allied Beacon Partners, Advent Securities, and CL Wealth Management pay disgorgement and prejudgment interest in the amounts of $619,881.92, $591,408.64, and $67,244.02, respectively, representing their proceeds from the Defendants’ fraud.
If you invested in AIC promissory notes or stock, please contact Erez Law to explore your legal options. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies. To learn more, please call us at 888-840-1571 or complete our “contact form.”
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