SEC Litigation Releases: Week in Review - November 11th, 2012

SEC Charges Purported Credit Union and Its Principal with Offering Fraud
November 8, 2012, (Litigation Release No. 22526)
The SEC filed a civil injunctive action against Stanley B. McDuffie and his entity, Jilapuhn, Inc (which has done business as Her Majesty's Credit Union) this week. According to the complaint (opens to PDF), from 2008 to 2012 McDuffie and HMCU enticed investors to purchase CDs "through the HMCU website and a branch office in the U.S. Virgin Islands," assuring investors that HMCU was a "secure, legitimate, regulated credit union." Furthermore, McDuffie and HMCU promised investors "above-market interest rates, and assured [them] that their deposits were insured by Lloyd's of London or the U.S. Virgin Islands' government." According to the SEC, in reality HMCU was "an unregulated, illegitimate credit union that never held share insurance covering investor deposits, and McDuffie and HMCU misappropriated investors' funds." The SEC has charged McDuffie and HMCU with violating various sections of the Securities Act and the Exchange Act.