SEC Wins Judgment|of $70 Million

WASHINGTON (CN) - The SEC said Friday that it has obtained final judgment of nearly $70 million against AIC Inc., a Richmond, Va.-based holding company, a subsidiary brokerage and their CEO.

The SEC sued AIC, Community Bankers Securities, and Nicholas D. Skaltsounis in Knoxville Federal Court in 2011.

The SEC claimed the defendants "conducted an offering fraud while selling AIC promissory notes and stock to numerous investors across multiple states, many of whom were elderly or unsophisticated brokerage customers. They misrepresented and omitted material information about the investments when pitching them to investors, including the safety and risk associated with the investments, the rates of return, and how the proceeds would be used by AIC," the SEC said in a statement announcing the final judgment.

It continued: "In reality, AIC and its subsidiaries were never profitable, and Skaltsounis and the companies used money raised from new investors to pay back principal and returns to existing investors."

A jury ruled for the SEC in October 2103.

Chief U.S. District Judge Thomas Varlan on Friday ordered AIC to pay a total of $35.6 in disgorgement, interest and penalties; Community Bankers Securities to pay a total of $31.2 million; and Skaltsounis to pay $2.6 million.

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