Securities and Exchange Commission v. Eurobond Exchange, Ltd., and Gerald L. Rogers, AKA J.K. Glenn

The Securities and Exchange Commission (“SEC”) brought this action against Gerald L. Rogers, president of the defendant Euro-bond Exchange, Ltd. (“Eurobond”), for violations of anti-fraud and registration provisions of the federal securities laws. The complaint charged Rogers with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 (the “1933 Act”), 15 U.S.C. §§ 77e(a) and 77e(c); the anti-fraud provisions of Section 17(a) of the 1933 Act, 15 U.S.C. § 77q(a); and the anti-fraud provisions of Section 10(b) of the Securities Exchange Act of 1934 (the “1934 Act”), 15 U.S.C. § 78j(b), and Commission Rule 10b-5, 17 C.F.R. 240.10b-5. The complaint sought a permanent injunction and disgorgement of Eurobond’s profits.

The SEC maintained that the investment program whereby Rogers sold to American citizens certain interest-bearing treasury bonds issued by foreign governments, purchased in large part with foreign currency loans carrying much lower interest rates than those received on the bonds, was an investment contract. The SEC claimed that Rogers violated federal securities law by not registering the investment program pursuant to sections 5(a)…