SEC v. George S. Blankenbaker, et al. was filed in the United States District Court for the Southern District of Indiana on March 31, 2021, seeking a permanent injunction enjoining the defendants from future trading, disgorgement of ill-gotten gains, and civil penalties.

The SEC filed a civil action against the defendants, an individual and three of his companies, based upon their illegal offering scheme that preyed primarily on the elderly.  In three years’ time, the defendants raised approximately $11 million from at least 109 investors, falsely representing that their money would be used to make short-term loans to food exporters in Asia that would result in profit.  In reality, the defendants misused approximately $8.1 million of the funds by directing them into hemp companies, using them for personal benefit, or making Ponzi-style payments to prior investors using new investors’ funds.

The SEC asserted claims against the defendants for violation of Section 10(b) of the Exchange Act and Exchange Rule 10b-5 as well as violations of Sections 5(a), 5(c), and 17(a) of the Securities Act.