| The U.S. District Court in Massachusetts last week imposed a $50,000 civil penalty on a North Reading man accused of unlawfully promoting and selling unregistered securities issue by a subprime auto financing company, the Securities and Exchange Commission said.
Thomas Kevin Keough and his wife were previously ordered to pay more than $350,000 in disgorgement of ill-gotten gains, the SEC said.
Keough was a defendant in a lawsuit brought by the commission against Inofin, its former executives and its sales agents alleging they illegally raised at least $110 million from hundreds of individual investors through the sale of unregistered Inofin notes and that Inofin and its executives lied about the company’s financial performance and how Inofin was using its investors’ money.
The SEC alleged that Keough unlawfully earned commissions by promoting and selling Inofin’s unregistered securities and that he concealed his activities from his broker-dealer employers by directing Inofin to pay his illegal commissions to his wife, Nancy, who was named as a relief defendant in the commission’s action for the purpose of recovering these funds from her.
In February, Keough agreed to a consent judgment as a partial settlement of the claims against him. Under that agreement, he was ordered to disgorge $368,430 in illegal commissions and to pay an additional $44,500 in interest. He was additionally enjoined from violating the Securities Exchange Act of 1934 and the Securities Act of 1933. The commission also issued an order in March barring him from certain parts of the securities industry, with the right to apply for reentry in three years.
More recently, the court leveled the $50,000 penalty against Keough.
The commission previously obtained final judgments by consent against Inofin’s former executives Michael J. Cuomo of Plymouth, Kevin Mann Sr. of Marshfield, and Melissa George of Duxbury, and against another Inofin sales agent, David Affeldt of Potomac, Maryland. They were all ordered to pay disgorgement and civil penalties and permanently enjoined from violating the Exchange Act and the Securities Act.
The SEC’s action remains pending against bankrupt Inofin.
