SEC v. Marshall E. Melton

Marshall E. Melton allegedly raised over $1 million from seven investors. According to the SEC’s complaint, Melton represented that investor funds would be used to buy and develop properties in downtown Laurinburg, North Carolina to generate profits for investors, but the representations were false. Melton allegedly intended to spend large chunks of the money on personal expenses unrelated to the Laurinburg properties and the Defendants in fact misused nearly two thirds of investor funds for Melton’s personal use. The court found that the Defendants violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, based on their misrepresentations regarding the use of investor funds.

Summary generated from official Securities and Exchange Commission press release