SEC Raps a&M Investments Over Unregistered Securities Offerings

Jack Humphrey, Regulatory journalist
February 16, 2011 /

The Securities and Exchange Commission sues a 77 year-old Amish from Ohio operating under the A&M Investments for offering unregistered securities to his fellow Amish, raising at least $30 million in illegal profits.

As in the case of the Illinois Pension Funds which the SEC has been probing for possible concealment of the real risk its investors are facing, Monroe Beachy and A&M Investments have been monitored and investigated by lawyers Brian Fagel and Sikora and accountant James Silverwood from the Division of Enforcement at the SEC’s Chicago Regional Office for allegedly making speculative investments from the investors’ money.

In a lawsuit filed in the U.S. District Court for the Northern District of Ohio in Akron, the SEC claimed Beachy has been offering investment contracts to his fellow Amish from 1986 to June 2010 through A&M Investments.

The SEC’s investigation found that the money of more than 2,600 investors was actually used for speculative investments.

Beachy has promised his investors of higher interest rates than the banks have offered during the time the fraudulent scheme took place. According to SEC, he told investors that their money would be spent for the purchase of risk-free U.S. government securities.

The A&M investors then treated their accounts as money market where they were withdrawing amounts at any time.

The investors estimated their total investments to have reached $33 million, though the assets on hand were less than $18 million, according to Sikora.

The SEC’s lawsuit imposes a permanent injunction on Beachy for violating federal securities laws, but it did not include financial penalties.

 

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