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SEC Freezes Assets of Missing Georgia-Based Investment Adviser

The Honorable Timothy C. Batten Sr. granted the SEC’s request for a temporary restraining order and entered an asset freeze for the benefit of investors against Aubrey Lee Price, PFG, LLC, PFGBI, LLC – the funds he managed – and his affiliated entities.  The SEC alleged that after sending a letter dated June 2012 titled “Confidential Confession for Regulators – PFG, LLC and PFGBI, LLC Summary,” Price went into hiding.  In the 22-page letter, Price admitted that he “falsified statements with false returns” in order to conceal between $20-23 million dollars in investor losses.

According to the complaint, Price raised approximately $40 million from approximately 115 investors, living primarily in Georgia and Florida.  The SEC alleged that Price began his scheme in 2008, selling membership interests in two unregistered investment funds, PFG, LLC and PFGBI, LLC (“the Funds.”)  The funds were managed by Price.  According to PFG’s private placement memorandum, the investment objective was to achieve “positive total returns with low volatility” by investing in a variety of opportunities, including equity securities traded on the U.S. markets.  Instead, Price used investors funds to invest in South America real estate and a troubled South Georgia bank.  Furthermore, PFG’s offering documents stated that investors’ funds would be kept in a custodial account at Goldman Sachs Execution & Clearing, L.P.   Between 2009 and 2011, more than 90% of PFG investor funds, around $36.9 million, were placed in a securities trading account at Goldman Sachs  The account suffered massive trading losses in addition to the frequent wire-transfers to PFG’s operating bank account.  By mid-May 2012, the remaining $480,000 in PFG’s Goldman Sachs account was transferred to PFG’s operating account, at which time the Goldman Sachs trading account was closed.  To conceal the depletion of the fund’s assets, Price created and provided false Goldman Sachs account statements and representation letters to investors and bank regulators, indicating fictitious investment returns.

The SEC filed a complaint in U.S. District Court for the Northern District of Georgia charging him with securities fraud.  The SEC stated, “Price raised nearly $40 million from investors and made woeful financial transactions that he hid from them … [n]ow both the money and Price are missing.”