ALABAMA
SECURITIES COMMISSION
770 WASHINGTON AVE, SUITE 570
MONTGOMERY, ALABAMA 36130-4700
Telephone: (334) 242-2984 or 1-800-222-1253. Fax: (334)
242-0240
Email: asc@asc.state.al.us. Website:
www.asc.state.al.us
FOR IMMEDIATE RELEASE
Wealth Builders International (WBI) FounderCEO
ArrestedRRESTED
MONTGOMERY,
ALABAMA (March
254,
2004) - The Honorable Ellen
Brooks, District Attorney for the15th Judicial Circuit, and Honorable Joseph P.
Borg, the Director of Tthe Alabama
Securities Commission, announced today the
arrest of Terry Harris, a who currently residents
ofin
Birmingham, Alabama(????). Harris
iswas
the founderfind
another word instead of leader—was he president, chairman? Etc of the former of the former Wealth Builders International, a Birmingham
based company. Harris is
currently (his status being held in a jail or out on bond)..
Harris was arrested by the Birmingham Police DepartmentDeputies
of the (Jefferson?) County
Sheriff's Office, in Birmingham, Alabama on
March 24, 2004 and
transported to the Montgomery County Jail by Montgomery County Sheriff deputies. Harris was released late Wednesday evening on a $15,000 bond.
The arrest was a result of a 3 count indictment
returned by the March 2004 Session of the Montgomery County Grand Jury. Harris was indicted on 1 count of Selling
Unregistered Securities,; and 1 1 count of Selling
Securities Without Benefit of Registration as a Securities Agent, and 1 count of
Transacting Business as an Unregistered Investment Advisor.
Borg said, “The investigation involving Harris and
WBI activities is continuing.”
The Alabama Securities
Commission’s Enforcement Division began investigating Wealth Builders International (“WBI”),
headquartered in Birmingham, due to discrepancies pertaining to the licensing
and registration of Wealth Builders International, Inc. and its operation. Under Alabama law it is unlawful for any
person to offer or sell any security into, within, or from the state or to give
investment advice unless that person and/or entity is registered or exempt from
registration.
Individuals
connected with WBI engaged in the business of advising others as
to the value of securities or as to the advisability of investing in,
purchasing, or selling securities.
During the course of the Commission’s investigation it was determined
that investor funds were not directly invested as represented.
Investor
funds were also withdrawn from the WBI account without notification to the
investors and utilized to pay salaries of office personnel, purchase office
supplies, and pay office lease payments.
Further, it was determined that investor’s funds were utilized to make
payments to some investors in the form of represented profit earnings, where
profits did not exist. Profits that
were posted to the individual Investor’s account were determined to be
misrepresentations, not true profits.
Investors were told they had profits in the accounts when in fact
significant losses occurred.. The
Commission alleged that WBI misrepresented the returns being made through WBI’s
trading efforts.
The
Commission’s investigation of WBI indicates that between September 1, 2001 and
February 26, 2003, approximately 1,767 investors deposited $4,743,537.98 either
in WBI or an associated entity.
-
more -
Investors
were paid approximately $952,338.90 allegedly as profits which in fact did not
exist. Trading
fees/losses
totaled $1,088,302.08. Unaccounted/
misappropriated funds totaled $197,829.05.
The amount of funds available for disbursement totaled approximately
$2.5 million.
To
accurately account for all investors’ funds it was necessary to liquidate WBI’s
holdings. To minimize any further losses to the investors, the Commission placed all
funds were placed in
an interest bearing trust account under the strict control of a Birmingham law
firm and under the review of the Commission.
There was less money in the accounts than would be required for all
individuals to receive a 100% return of their original investment. The Commission issued 1643 checks to
investors amounting to 6860% of their investment.
Note: A copy of the Cease
& Desist Order issued to Wealth Builders International can be found on line
at the Alabama Securities Commission website at www.asc.state.al.us.
The Director of the Alabama Securities Commission (ASC)
cautions potential investors to thoroughly check out any investment opportunity. Contact ASC for inquiries regarding
securities broker-dealers, agents, investment advisors, investment advisor
representatives, financial planners, the registration status of securities, to
report suspected fraud, or obtain consumer information:
ALABAMA SECURITIES COMMISSION
770
WASHINGTON AVE, SUITE 570
MONTGOMERY,
ALABAMA 36130-4700
Telephone:
(334) 242-2984 or 1-800-222-1253. Fax: (334) 242-0240
Email: asc@asc.state.al.us. Website:
www.asc.state.al.us
###
If you have questions or require more information contact:
Daniel
G. Lord
Education
and Public Affairs Manager