Firm Tied to Ponzi Scheme Settles With SEC
SHERMAN, Texas (CN) - A company that securities regulators accuse of having benefitted from a $35 million Ponzi scheme will pay a $250,000 settlement, a federal judge ruled.
The case at issue arises from the asset freeze that the Securities and Exchange Commission obtained against the Stewardship Fund in 2011, saying its owner James Temme lied to investors that "he was using their money to buy and restructure pools of non-performing home mortgages,"
A court-appointed receiver in the case told the court he has evidence that Halo Cos. received more than $1 million from Stewardship entities in 2010 and 2011.
The receiver had no evidence of a loan, however, and Halo claims the majority of the money "was payment for services rendered."
"Based on the timing of the transfers of funds and the relationship between the receivership entities and Halo, the receiver has alleged a fraudulent transfer claim against Halo in the amount of $1.2 million," U.S. District Judge Ron Clark explained.
Temme asserted his Fifth Amendment privilege and has refused to testify in the Halo matter.
Judge Clark approved a settlement on Sunday that requires Halo to pay $250,000 in 12 monthly payments of $20,833.
He did so despite objections from two groups of investors: a faction of nonparties to the suit and the Stewardship Receivership Claimants Association.
Their issue with the settlement "is that it fails to articulate for the court and other interested parties the values of the assets subject to the settlement," according to the opinion.
Clark noted that the receiver addressed those concerns in a reply.
"The receiver has evaluated the evidence supporting any potential claims against Halo, the potential recovery, and the time and money required to pursue such claims and believes that the settlement represents a far greater recovery for the receivership estate," he wrote.