September 3, 2003
Sean Caine, 410-576-6357
SECURITIES DIVISION SHUTS DOWN FRAUDULENT INVESTMENT FUND AND PROMOTER
General J. Joseph Curran, Jr. announced today that his office's
Securities Division issued a Summary Order to Cease and Desist against
Phydea Equity Fund, LLC and its president, Mark E. Phillips, aka
Mark Le Roy Aaron, of Elkton, Maryland. The order charges them with
violating the Maryland securities laws by selling hundreds of thousands
of dollars worth of fraudulent securities from January 2000 to the
present. According to the order, Phydea Equity Fund, LLC and Phillips
must immediately cease and desist selling unregistered securities,
employing unregistered securities brokers or investment advisers,
and continuing the fraudulent investment scheme.
order alleges that Phydea Equity Fund, LLC and Phillips raised more
than $600,000 from 89 investors in Maryland and throughout the country.
Phillips used his website, www.phydea.com, and advertisements in
business periodicals to solicit investors in the Phydea Equity Fund,
LLC. Phillips promoted the fund by claiming that he was a "stock
picker" who had great returns in a down market. He sent investors
regular statements showing a profit on their investment and a 32.3%
average rate of return since 1999. In reality, according to the
order, Phillips lost most of the money through unsuccessful trading
or used the funds to pay personal expenses, including the purchase
of diamond wedding rings and trips to Atlantic City casinos. Neither
Phillips nor Phydea Equity Fund, LLC were registered with the Maryland
Securities Division, as required by Maryland law.
"Phydea Equity Fund, LLC and Mr. Phillips have defrauded investors,"
Attorney General Curran said. "We want to ensure that they
do not harm any more unsuspecting victims. By issuing a summary
order, we can put an immediate stop to these violations."
emphasized that the Securities Division's investigation of this
matter is continuing and urges anyone who invested funds with Mark
Phillips or Phydea Equity Fund, LLC or who has information concerning
their investment programs, to call the Securities Division of his
office at 410-576-7059.
reminded investors to call the Securities Division at 410-576-6360
before they invest to find out whether their investment adviser,
broker and securities are registered. Even when an investment program
looks reasonable, and friends and family trust the promoter, it's
better to take a few minutes to verify the status of the promoters.