FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
SEC Charges Oklahoma Investment Adviser and Cohort with Fraud
On August 27, 2013, the Securities and Exchange Commission brought securities fraud charges against former investment adviser Larry J. Dearman, Sr. and his close friend, Marya Gray, in connection with fraudulent securities offerings that raised at least $4.7 million from more than 30 of Dearman's advisory clients.
The complaint, filed in the U.S. District Court in Tulsa, Oklahoma, alleges that Dearman invested his clients in various businesses that Gray owned in Bartlesville, Oklahoma. According to the Commission, Dearman and Gray misled investors about the safety of the investments and how their funds would be used, telling them, for instance, that investor funds would be used to purchase equipment for one of Gray's companies, Bartnet Wireless Internet, Inc. In truth, however, Gray and Dearman squandered the vast majority of investor funds on gambling, personal expenses, and Ponzi payments. The complaint also alleges that Dearman stole roughly $700,000 from some of his clients through various ruses.
The complaint alleges that Dearman and Gray violated or aided and abetted violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and (2) of the Investment Advisers Act of 1940. The Commission seeks permanent injunctive relief, disgorgement plus prejudgment interest, and civil monetary penalties from both Defendants. In addition, the Commission has named as Relief Defendants three of Gray's businesses, including Bartnet Wireless Internet, Inc., The Property Shoppe, Inc., and Quench Buds Holding Company, LLC, seeking to recover funds they derived from Defendants' fraud.
