---------------- FILED - GR May 26,20093:10 PM TRACEY CORDES, CLERK US. DISTRICT COURT WESTERN DISTRICT OF MICHIGAN BY: _ald_I__ UNITED STATES DISTRICT COURT WESTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION SECURITIES AND EXCHANGE COMMISSION, Plaintiff, v. 1:09-cv-483 MARK R. HAMLIN, CIVIL ACTION No. Paul L Maloney KINGDOM FIRST TRADING, LLC, and Chief U.S. District Judge KINGDOM FIRST CORP. HON. Defendants, / COMPLAINT Plaintiff, Securities and Exchange Commission ("Commission"), alleges and states as follows: NATURE OF THE ACTION 1. This matter involves fraudulent misrepresentations in the unregistered offer and sale of securities by Defendant Mark R. Hamlin ("Hamlin") and his two companies, Defendant Kingdom First Corp. and Defendant Kingdom First Trading, LLC ("Kingdom First Trading"). 2. From approximately April 2005 through June 2008, Hamlin, individually, and through Kingdom First Corp., offered and sold securities to at least 90 investors and raised approximately $2 million.
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SEC Complaint: Mark R. Hamlin, Kingdom First Trading, LLC ... · Kingdom First Trading, LLC is an Okemos, Michigan limited liability company that Hamlin formed in January 2007. Hamlin
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FILED - GR May 26,20093:10 PM TRACEY CORDES, CLERK
US. DISTRICT COURT WESTERN DISTRICT OF MICHIGAN
BY: _ald_I__
UNITED STATES DISTRICT COURT WESTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
SECURITIES AND EXCHANGE COMMISSION,
Plaintiff,
v. 1:09-cv-483 MARK R. HAMLIN, CIVIL ACTION No. Paul L Maloney KINGDOM FIRST TRADING, LLC, and Chief U.S. District Judge KINGDOM FIRST CORP. HON.
Defendants,
/
COMPLAINT
Plaintiff, Securities and Exchange Commission ("Commission"), alleges and states as
follows:
NATURE OF THE ACTION
1. This matter involves fraudulent misrepresentations in the unregistered offer and sale of
securities by Defendant Mark R. Hamlin ("Hamlin") and his two companies, Defendant
Kingdom First Corp. and Defendant Kingdom First Trading, LLC ("Kingdom First Trading").
2. From approximately April 2005 through June 2008, Hamlin, individually, and through
Kingdom First Corp., offered and sold securities to at least 90 investors and raised approximately
$2 million.
3. Hamlin represented to investors that he was a day trader and that he would invest their
funds, along with other investors' funds, in the stock market. Hamlin described his day trading
strategy as one in which he closed out all open positions at the end of the day and told some
investors that he only invested in stocks.
4. Hamlin also told some investors that he could double their money, represented to other
investors that he had earned past investment returns exceeding 100%, and told certain investors
that they would not lose their money.
5. Hamlin, who acted as an unregistered investment adviser, also represented that he
would send the investors weekly reports of his trading and their profits or losses and that he
would not receive a commission or any other financial benefit unless the investments were
profitable. In the weekly trading reports, Hamlin represented that the investors earned profits in
all but seven weeks of trading during the period in question.
6. Hamlin's representations regarding his use of investor funds, trading profits, and
trading strategy were all false.
7. Contrary to his representations, Hamlin invested only $1,248,370 of the approximately
$2 million that he received from the investors. Further, Hamlin subsequently transferred
approximately $627,000 of investor funds from his and Kingdom First Trading's brokerage
accounts into his bank accounts and used this money, along with the $759,000 in investor funds
that he never invested, to meet $755,000 in investor withdrawal requests and to pay $668,000 in
personal expenses.
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8. Moreover, from April 2005 through June 2008, Hamlin's trading resulted in losses of
approximately $644,862. Hamlin's trading was profitable during only nine of the 39 months of
the offering, and generated a total of only $22, ISO in profit for those months.
9. Further, Hamlin did not close out all open securities positions at the end of the day,
and, beginning in July 2006, Hamlin frequently traded options.
10. Hamlin, Kingdom First Corp., and Kingdom First Trading, LLC ("Kingdom First
Trading"), directly and indirectly, have engaged, and unless enjoined, will continue to engage, in
acts, transactions, practices and courses of business that violate Section 17(a) of the Securities
Act of 1933 ("Securities Act") [15 U.S.C. §§ 77e(a), 77e(c), and 77q(a)], Section lOeb) of the
Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. § 78j(b)], and Rule 10b-5
promulgated thereunder [17 C.F.R. § 240.1 Ob-5].
11. Hamlin and Kingdom First Corp., directly and indirectly, have also engaged, and
unless enjoined, will continue to engage, in acts, transactions, practices and courses of business
that violate Sections 5(a) and 5(c) of the Securities Act [15 U.S.c. §§ 77e(a), 77e(c)], and
Kingdom First Corp., directly and indirectly, has also engaged, and unless enjoined, will
continue to engage, in acts, transactions, practices and courses of business that violate Section
7(a) of the Investment Company Act of 1940 ("ICA")[15 U.S.C. § 80a-7(a)]. Hamlin directly
and indirectly, has also engaged, and unless enjoined, will continue to engage, in acts,
transactions, practices and courses of business that violate Sections 206(1) and 206(2) of the
and Rule IOb-5 promulgated thereunder [17 C.F.R. §240.10b-5]; and Section 7(a) of the lCA [15
U.S.C. § 80a-7];
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C. Permanently enjoining Kingdom First Trading, its officers, agents, servants,
employees, attorneys, and all person in active concert or participation with them, and each of
them, from further violations of Sections 17(a)(l), (2) and (3) ofthe Securities Act [15 U.S.C. §§
77q(a)(l), (2) and (3)]; Section lOeb) ofthe Exchange Act [15 U.S.C. §78j(b)], and Rule IOb-5
promulgated thereunder [17 C.F.R. §240.1 Ob-5];
D. Ordering the Defendants to disgorge their ill-gotten gains, derived directly or indirectly
from the conduct complained of herein, together with prejudgment interest thereon;
E. Ordering Hamlin to pay an appropriate civil monetary penalty pursuant to Section
20(d) of the Securities Act [15 U.S.C. §77t(d)], Section 21(d)(3) of the Exchange Act [15 U.S.C.
§78u(d)(3)], and Section 209(e) of the Advisers Act [15 U.S.C. §80b-9(e)];
F. Retaining jurisdiction of this action in accordance with the principles of equity and the
Federal Rules of Civil Procedure in order to implement and to carry out the terms of all orders
and decrees that may be entered or to entertain any suitable application or motion for additional
relief within the jurisdiction of the Court; and
G. Granting such further relief as the Court may deem appropriate.
Respectfully submitted,
DATED: May 26, 2009 /s/ Steven L. Klawans Steven L. Klawans Jennifer L. Hieb Attorneys for Plaintiff U.S. Securities and Exchange Commission 175 West Jackson Boulevard, Suite 900 Chicago, IL 60604 Telephone: (312) 886-1738 (Klawans)
~~ .FranCe;~~ Assistant U.S. Attorney P.O. Box 208 Grand Rapids, MI 49501-0208 Telephone: (616) 456-2404 Facsimile: (616) 456-2510 E-mail: [email protected]
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1:09-cv-483 ....JS 44 (Rev 12/07) CIVIL COVER SHEET Paul L Maloney The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of'piead in! vided
by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is reqUIred for t atingChief U.S. District JUdge the civil docket sheet. (SEE INSTRUCTIONS ON THE REVERSE OF THE FORM.)
I. (a) PLAINTIFFS
U.S. Securities and Exchange Commission
(b) County of Residence of First Listed Plaintiff
(EXCEPT IN U.S. PLAINTIFf CASES)
(c) Attorney's (Firm Name, Address. and Telephone Nwnber)
See Attachment
DEFENDANTS Mark R. Hamlin Kingdom First Trading, LLC Kingdom First Corp.
County of Residence of First Listed Defendant ...;S~h_i_a~w...;a...;s...;s~e...;e _ (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNAnON CASES. USE THE LOCATION OF THE
LAND INVOLVED.
Attorneys (If Known) Joseph H. Spiegel 825 Victors Way, Suite 300 A n Ar r MI4 1 7 4 7 1- 4
II. BASIS OF JURISDICTION (Place an "X" inane Box Only)
IX I u.s. Government Plaintiff
o 3 Federal Question (U.S. Government Not a Party)
o 2 U.S. Government Defendant
o 4 Diversity
(Indicate Citizenship of Parties in Item III)
III. CITIZENSHIP OF PRINCIPAL P ARTIES(Place an "X" in One Box for Plaintiff (For Diversity Cases Only) and One Box for Defendant)
PTF DEF PTF DEF Citizen of This State 0 1 0 I Incorporated or Principal Place 0 4 0 4
of Business In This State
Citizen of Another State
Citizen or Subject of a Forei Coun
o 2 0 2 Incorporated and Principal Place of Business In Another State
o 3 0 3 Foreign Nation
o 5 0 5
o 6 0 6
IV NATURE OF SUIT (Place an "X" in One Box Onlv)
0 I 10 Insurance 0 120 Marine o 130 Miller Act 0 140 Negotiable Instrument 0 150 Recovery of Overpayment
& Enforcement ofJudgment 0 15 I Medicare Act 0 152 Recovery of Defaulted
Student Loans (Excl. Veterans)
0 153 Recovery of Overpayment of Veteran's Benefits
o /".REAtiI!R()~' ><:> o 210 Land Condemnation o 220 Foreclosure o 230 Rent Lease & Ejectment o 240 Torts to Land o 245 Tort Product Liability o 290 AII Other Real Property
PERSONAL INJURY 0 310 Airplane 0 315 Airplane Product
PERSONAL INJURY o 6 I0 Agriculture o 422 Appeal 28 USC 158 0 400 State Reapportionment 0 362 Personal Injury • o 620 Other Food & Drug o 423 Withdrawal 0 410 Antitrust
Med. Malpractice o 625 Drug Related Seizure 28 USC 157 0 430 Banks and Banking 0 365 Personal Injury • of Property 2 I USC 881 0 450 Commerce
Product Liability o 630 Liquor Laws 0 460 Deportation 0 368 Asbestos Personal o 640 R.R. & Truck o 820 Copyrights 0 470 Racketeer Influenced and
Injury Product o 650 Airline Regs. 0 830 Patent Corrupt Organizations Liability o 660 Occupational o 840 Trademark 0 480 Consumer Credit
PERSONAL PROPERTY SafetylHealth 0 490 Cable/Sat TV 0 370 Other Fraud o 690 Other 0 8I0 Selective Service 0 371 Truth in Lending III 850 Securities/Commodities/ 0 380 Other Personal o 710 Fair Labor Standards 0 861 HIA (I395ft) Exchange
Property Damage Act o 862 Black Lung (923) 0 875 Customer Challenge 0 385 Property Damage o 720 LaborlMgmt. Relations 0 863 DIWCIDIWW (405(g)) 12USC3410
Product Liability o 730 LaborlMgmt.Reporting 0 864 ssm Title XVI 0 890 Other Statutory Actions & Di sclosure Act o 865 RSI (405(lI;)) 0 891 Agricultwal Acts
,pRtS6N'ERi8&'tii\l10NSti o 740 Railway Labor Act . /iJl1llIl.:ii:RAtit)fH'SUIlliS . 0 892 Economic Stabilization Act 0 510 Motions to Vacate o 790 Other Labor Litigation o 870 Taxes (U.S. Plaintiff 0 893 Environmental Maners
Sentence o 791 Empl. Ret. Inc. or Defendant) 0 894 Energy Allocation Act Habeas Corpus: Security Act o 87 I IRS-Third Party 0 895 Freedom ofInformation
0 530 General 26 USC 7609 Act 0 535 Death Penalty TION 0 900Appeal of Fee Determination 0 540 Mandamus & Other o 462 Naturalization Application Under Equal Access 0 550 Civil Rights o 463 Habeas Corpus to Justice 0 555 Prison Condition Alien Detainee 0 950 Constitutionality of
o 465 Other Immigration State Statutes Actions
Appeal to District Judge from Magistrate Jud ment
V. ORIGIN (Place an ..X.. in One Box Only)
~ I Original o 2 Removed from 0 3 Remanded from 0 4 Reinstated or 0 5 Transferred from 0 6 Multidistrict o 7 Proceeding State Court Appellate Court Reopened another dlstnct Litigation
s eCI
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
VI. CAUSE OF ACTION ~15""::":U....C"..:.77.... a,!:,--,1... ......... ....... S.... .... ...... 14"'-S.... ......v ... 5-"U,""S,""C,-7 uu.>e<.L..><a"""nd 78""a",,a.......,,;15,,,-,,,U.... C-"8'""0;:.:.a-..;;z4......15'-U~C 8""'Ob~-...... _ Brief description of cause:
Fr I nt nr 'st r tock ff rin VII. REQUESTED IN o CHECK IF THIS IS A CLASS ACTION DEMANDS CHECK YES only if demanded in complaint:
I. (c) Attorney's (Firm Name, Address, and Telephone Number)
Steven L. Klawans Jennifer L. Hieb Attorneys for Plaintiff U.S. Securities and Exchange Commission 175 West Jackson Boulevard, Suite 900 Chicago, IL 60604 Telephone: (312) 886-1738 (Klawans) Telephone: (312) 353-7411 (Hieb) Facsimile: (312) 353-7398 E-mail: [email protected] E-mail: [email protected]
W. Francesca Ferguson Assistant U.S. Attorney P.O. Box 208 Grand Rapids, MI 49501-0208 Telephone: (616) 456-2404 Facsimile: (616) 456-2510 E-mail: [email protected]