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DOCKET NO. CV-05-198
SECURITIES ADMINISTRATOR, )
v. ) COMPLAINT
JAMES L. PARIS, )
The State of
2. This Court has jurisdiction pursuant to 10 M.R.S.A. § 8003(5)(B) (Supp. 2004) and 32 M.R.S.A. §§ 10602-10603 (1999 and Supp. 2004).
In or about January of 1998,
In soliciting the loans,
On or about October 2, 2000,
At no time prior to obtaining the Polak loan or the Stred extension did
9. At least in part due to the embezzlement, Paris and JLPFS defaulted on the loans.
10. On August 4, 2003, the Securities Administrator issued a Notice of Intent to take administrative action against Paris, JLPFS, and Carmen Paris for violations of the Revised Maine Securities Act in conjunction with the loans and Stred extension.
In February of 2004,
any payment is not received within one week after the due date, it shall be considered
a breach of this consent agreement, and, within thirty days,
14. The Act prohibits investment advisers and their employees from engaging “in any act, practice, or course of business which operates . . . as a fraud or deceit upon any client.” 32 M.R.S.A. § 10203 (1999).
15. Under the Act, “every person who directly or indirectly controls another person” who commits a violation of the Act “is liable to the same extent as that other person, unless the person otherwise secondarily liable . . . proves that the person did not know, and in the exercise of reasonable care could not have known, of the existence of the facts by reason of which liability is alleged to exist.” 32 M.R.S.A. § 10602(3) (Supp. 2004.)
16. The Securities Administrator may refer violations of the Act to the Attorney General for enforcement, and the Attorney General may initiate a civil action in the Superior Court. 32 M.R.S.A. § 10602(1)(D) (1999).
17. In an enforcement action under the Act, the Court may grant a variety of legal and equitable remedies, including injunctions, civil penalties of up to $10,000 for each violation, restitution, and disgorgement. 32 M.R.S.A. § 10603 (1999).
The Securities Administrator may enter into consent agreements with persons
suspected of violating the Act. 10 M.R.S.A.
§ 8003(5)(B) (Supp. 2004). Consent agreements
are “enforceable by an action in the Superior Court.”
(Fraud or Deceit by an Investment Adviser or an Investment Adviser’s Employee)
19. The State repeats and realleges paragraphs 1 through 18 as if set forth fully herein.
20. By failing to disclose that: (1) JLPFS was losing money; (2) that Paris was not involved in the day-to-day operations of JLPFS or in oversight of its finances; and that (3) Carmen Paris had been systematically embezzling funds from JLPFS from the beginning of 1999 at a rate of approximately $500,000 a year, Paris engaged in acts, practices, and a course of business that operated as a fraud or deceit upon the Stred and Polack, all in violation of 32 M.R.S.A. § 10203 (1999).
21. Additionally, Paris is liable as a control person under 32 M.R.S.A. 10602(3) (Supp. 2004) for Carmen Paris’ embezzlement because Paris directly or indirectly controlled Carmen Paris and Carmen Paris’ embezzlement encompassed acts, practices, and a course of business that operated as a fraud or deceit upon the Stred and Polack, all in violation of 32 M.R.S.A. § 10203 (1999)
(Breach of Consent Agreement)
22. The State repeats and realleges paragraphs 1 through 21 as if set forth fully herein.
By failing to make payments as required by the Consent Agreement,
REQUEST FOR RELIEF
WHEREFORE, the State requests that this Honorable Court grant the following relief:
An order requiring
2. A civil penalty of $10,000 for each violation of the Act;
3. An order requiring Paris to comply with the Consent Agreement, including by paying $10,000 to the Securities Administrator, plus interest, for distribution to Stred and Polack;
4. A permanent injunction prohibiting Paris from acting as an investment advisor, investment advisor representative, broker-dealer, securities agent, financial planner, or other financial or investment professional in the State of Maine; and
5. Such other and further relief as this Court deems appropriate.
/s/ Michael J. Colleran_______
MICHAEL J. COLLERAN
Assistant Attorney General
6 State House Station
Tel. (207) 626-8800
Bar. No. 9247
Attorney for Plaintiffs