Blackbird Capital Partners LLC and Owners Charged in Ponzi Scheme
On November 28, 2016, the Securities and Exchange Commission (“SEC”) obtained a temporary restraining order and an emergency asset freeze in a $3 million offering fraud and Ponzi scheme orchestrated by Andrew Kelley, Paul Shumway and their company Blackbird Capital Partners, LLC, a former Commodity Trading Advisor located in Draper, Utah.
The SEC’s complaint, filed in federal court in Utah, alleges that since at least September 2014, Kelley and Shumway solicited several investors to invest at least $3.1 million with Blackbird, or through a separate “friends and family” account, which Kelley claimed he managed as a proprietary trading fund. The complaint further alleges that Kelley and Shumway claimed that Kelley’s trading had historically produced substantial rates of returns and could do so in the future due to his expertise in trading. According to the complaint, the investments with Blackbird were supposed to be used to invest in various security and futures instruments. Instead, investor funds were used to pay returns to earlier investors and for other personal and business expenses.
The SEC’s complaint charges Kelley and Blackbird with violations 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. The complaint also charges Shumway with violations of Section 17(a) of the Securities Act. The complaint seeks a preliminary and permanent injunction as well as disgorgement, prejudgment interest and civil penalties from Kelley, Shumway and Blackbird.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or by email at [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855
www.SecuritiesLawyer101.com
