The U.S. District Court for the Central District of California has slapped Lincoln Funds International Inc with a temporary restraining order and told the advisory firm to temporarily freeze its assets. Judge Cormac J. Carney also appointed a temporary receiver over the assets, as well as the assets of three Lincoln Biotech Venture funds and Brookstone Capital, which is Lincoln Fund’s predecessor company.
Lincoln Funds, along with its three principals, are accused of engaging in a biotechnology investment fraud scam, raising over $21.8 million from hundreds of investors. According to the SEC, Robert L. Carver, his son Robert L. Carver II, and James L. DeMer sold securities in Lincoln Funds, the three biotech funds, and Brookstone Capital while making “baseless predictions” and promising that there would be initial public offerings at the two companies.
The Commission charges that the defendants took part in “sham transactions” to make it appear as if Lincoln Funds was not associated with Brookstone or Carver because both had been subject to state regulatory orders. It is also accusing the defendants of misappropriating and misusing at least $2.5 million in investor funds, defrauding the partnerships as a result.
The SEC has charged all defendants with fraud in the offer or sale of securities, unregistered offer and sale and securities, investment advisor fraud, and purchase/sale securities-related fraud. The three principals are also charged with failure to register as a broker dealer.
The SEC complaint seeks to enjoin the defendants from further federal securities law violations, as well as disgorgement, an asset freeze, and civil penalties.
The California Department of Corporations has also ordered Lincoln Funds and two of its principals to cease and desist from securities transactions involving misleading or bogus statements.
If you have are the victim of investment fraud, our stockbroker fraud law firm can help you explore your legal options for recovery. Contact Shepherd Smith Edwards & Kantas today.
Related Web Resources:
SEC Halts a $21 Million Fraud Involving Biotech Investment Funds, SEC.gov