The Securities and Exchange Commission has filed an emergency enforcement action against an Illinois investment manager charging him with fraudulently obtaining at least $10 million from around 300 investors.
The SEC has obtained an emergency court order freezing the assets of Scott M. Ross, Gilberts, Ill., and appointing a receiver.
Beginning in 2007, Ross sold investments in 3 supposed private investment funds that he claimed to manage, the SEC alleges in its complaint.
Ross raised about $2 million from investors for one fund, the Elucido Fund LP, telling them that Elucido would invest in life settlement contracts, according to the complaint.
With the second fund, Ross raised around $2 million that was to be used to purchase stock in a company called Moondoggie Technologies, the SEC charges.
Finally, Ross raised between $6 million and $7 million for the Maize Fund LP, telling investors that their money would be pooled and invested in a Forex Account in which traders would engage in arbitrage currency trading, the SEC alleges.
The complaint charges that Ross siphoned off some $2 million from Elucido and an undetermined amount from the Moondoggie Technology stock purchases. Among other alleged conduct, Ross misappropriated funds to purchase a skybox at the Indianapolis Colts’ stadium and to pay supposed returns to investors, the SEC says.
The complaint alleges that Ross violated the Securities Act of 1933 and the Securities Exchange Act of 1934. In addition to emergency relief, the SEC seeks return of Ross’s gains, prejudgment interest and a civil penalty.
Ross consented to the emergency relief sought by the SEC and the Honorable James B. Zagel, United States District Court, Northern District of Illinois, issued an order permanently enjoining Ross from further violations, freezing his assets and appointing Philip L. Stern of the law firm of Neal Gerber & Eisenberg LLP as receiver in the matter, the SEC says in a statement.
The case is SEC v. Scott M. Ross, Civil Action No. 09-CV-683 (N.D. Ill.)