Judah and Excel Lease Fund Settle $40M Debenture Offering Suit in TX District Court

Holding:

Without admitting or denying the Securities and Exchange Commission’s (“SEC”) allegations, Texas businessman Benny L. Judah and his company, Excel Lease Fund, Inc. have consented to the asset-freeze and receivership orders, as well as permanent injunctions against future violations of anti-fraud provisions of federal securities laws, particularly the Securities Act of 1933 and the Securities Exchange Act of 1934. Judah has also consented to an injunction issued by the U.S. District Court for the Northern District of Texas prohibiting him or any entity he owns or controls from issuing securities in the future. The SEC had alleged that from January 2006 through at least March 2009, the Defendants engaged in a fraudulent offering of debenture securities issued by Excel. In offering materials, defendants represented that Excel sought to raise $50 million to fund Excel's equipment-leasing business, to fund Excel's "investments," and to retire debentures that Excel had issued earlier. In practice, however, Judah used offering proceeds in a manner grossly inconsistent with those representations.

Detailed Summary:

Based on the SEC’s complaint, Judah was a resident of Lubbock, Texas, and the president and sole owner of Excel. Judah is not registered with the SEC in any capacity. Judah is a recidivist securities-law violator, the district court having imposed an injunction against him in 2001 for violations of the securities-registration and anti-fraud provisions of the federal securities laws, specifically Sections 5(a), 5(c), andI7(a) of the Securities Act [15 U.S.C. §§77e(a), 77e(c), and 77q(a)] and Section 10(b) ofthe Exchange Act [15 U.S.C. § 78j(b)] and of Rule 10b-5 [17 C.F.R. § 240.10b-5] thereunder. Complaint, paragraph 7, citing SEC v. Benny…

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