SEC Charges L.A.-Based Individuals With Multimillion Dollar Fraud of at Least 40 Investors
The U.S. Securities and Exchange Commission filed charges against Los Angeles-based Frederick Tayton Dencer (Tayt Dencer), age 68, and his son Luke Abelard Dencer (Luke Dencer), age 36, and their Los Angeles-based companies Standard Holdings Inc. and Standard Huaxia Ltd. for defrauding investors out of millions of dollars, which the Dencers misused and misappropriated to fund their lavish lifestyles.
The SEC also charges Dennis Edward Butler, age 47, of Westwood, N.J., for acting as an unregistered broker in connection with the scheme.
The SEC’s complaint, filed in the U.S. District Court for the Central District of California, alleged that from late 2017 to at least 2023, the Dencers and their companies raised over $17 million from at least 40 investors purportedly to form a company to provide streaming content to China via an app. In reality, as the complaint alleges, the Dencers misappropriated more than $2.8 million, including to pay for their home leases, luxury cars, designer clothes and jewelry, vacations, gifts for family and girlfriends, a private detective to follow two of Tayt Dencer’s girlfriends, and hundreds of thousands of dollars in cash withdrawals.
Tayt Dencer and Luke Dencer operated Standard Holdings and Huaxia from several addresses in the Los Angeles area. Starting in 2017, the Standard Holdings Defendants told investors that the companies were developing an app that would stream content to China. The Standard Holdings Defendants initially stated that they planned to stream music into China. By 2019, the Standard Holdings Defendants changed their purported business plans to provide educational content to children in China.
The complaint further alleged that the Dencers and their companies sold investors stock that did not exist, made Ponzi-like payments to investors, and misled investors, many of whom are older adults, about the use of their money and safeguarding of their investments in segregated or trust accounts.
The SEC’s complaint also alleges that from about April 2019 to at least mid-2022, Dennis Butler improperly operated as an unregistered broker by soliciting a number of investors to invest more than $2.3 million for the scheme.
The SEC’s complaint charges Tayt Dencer, Luke Dencer, Standard Holdings, and Standard Huaxia with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also charges Tayt Dencer and Luke Dencer with control person liability under Section 20(a) of the Exchange Act for Standard Holdings’s and Standard Huaxia’s violations of the Exchange Act provisions. The complaint seeks permanent injunctions, civil penalties, and disgorgement with prejudgment interest against these defendants, in addition to officer-and-director bars against Tayt Dencer and Luke Dencer.
In addition, the complaint charges Dennis Butler with violating the broker-dealer registration provisions under Section 15(a) of the Exchange Act, and seeks an injunction, disgorgement with prejudgment interest, and a civil penalty.
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