Corporate & Securities Law

The SEC recently filed an emergency enforcement action against SBM Investment Certificates, Inc. f/k/a 1^st Atlantic Guaranty Corporation, SBM Certificate Company, Geneva Capital Partners, LLC and Eric M. Westbury to stop them from engaging in activities that violate Federal securities laws.

The SEC?s complaint in part is centered around investors who have suffered losses investing in SBM Investment Certificates.  The SEC alleges that SBM and 1^st Atlantic issued ?face amount certificates? totaling more than $36 million to over 2000 investors.  Most of the investors are individuals whose certificates represent investments less than $10,000.

Face amount certificates are a type of fixed-income investment which promises to pay the principal amount plus interest upon maturity.  For the protection of investors, the face amount certificate companies issuing the certificates are required to maintain certain reserves on all outstanding securities.  

The SEC has alleged that since approximately January 2003, 1^st Atlantic and SBM have failed to maintain the required minimum reserves.  As a result, if investors attempt to redeem their certificates in normal course, neither SBM nor 1^st Atlantic would have adequate reserves to pay back all of the invested capital.  Furthermore, SBM and 1^st Atlantic misled investors by permitting existing investors to ?roll-over? their invested capital and claimed that the investment was a ?safe investment vehicle?, without disclosing the lack of reserves or its impact on the nature and quality of their investment.

The attorneys at Eccleston Law believe that advisers may have encouraged investors to purchase SBM certificates, which have been frozen by an order from a federal judge in New York.

Eccleston Law represents individual and institutional investors to recover their investment losses caused by unsuitable investment recommendations, breach of fiduciary duty, negligence or other misconduct. We have extensive experience representing investors in arbitration and litigation disputes with securities broker-dealers and investment advisory firms, and have recovered tens of millions of dollars for investors

If you are an investor that has suffered losses investing in an SBM investment certificate, your losses may be recoverable through securities arbitration.  Please contact Jim Eccleston at the Eccleston Law Offices at 312-332-0000 to discuss your recovery options.