Compliance
Compliance Corner: SEC, Clarence Dean Alford
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Securities and Exchange Commission
The Securities
and Exchange Commission has charged former Georgia state
legislator and former member of the Georgia Board of Regents,
Clarence Dean Alford, with defrauding at least 100 investors in
his now-bankrupt energy development company, Allied Energy
Services LLC.
From 2017 to 2019, Alford fraudulently raised at least $23 million by selling promissory notes to investors – primarily Indian-American professionals – that he guaranteed would provide high annual rates of return, the SEC said in its statement on July 30.
Alford presented Allied as a successful business when in fact it was struggling, and claimed that investors’ funds would finance energy projects while using most of the funds to make interest payments to earlier investors and for personal expenses, including building a multimillion-dollar home. In 2019, Alford’s alleged scheme collapsed when he failed to make promised interest payments to several investors and then failed to repay the investors’ principal.
“As alleged in our complaint, Alford was a prominent member of the community who misled retail investors for personal gain,” Justin Jeffries, associate regional director for the SEC’s Atlanta Regional Office, said. “Investors should be wary whenever they are promised guaranteed, lucrative investment opportunities.”
Without admitting or denying the allegations, Alford consented to the entry of a judgment finding that he violated the antifraud provisions of the federal securities laws and ordering permanent and conduct-based injunctions. Alford also agreed that the amounts of civil penalties, disgorgement, and prejudgment interest would be determined by the court at a later date upon motion by the SEC. The proposed judgment is subject to court approval.
Staff in the SEC’s Atlanta Regional Office conducted the investigation and will lead the litigation. The SEC appreciates the assistance of the Georgia Secretary of State’s Securities Division.