The Securities and Exchange Commission has sued a Georgia attorney and his client for securities fraud for failing to disclose the client’s criminal indictment in offering documents related to the 2006 sale of $2.96 million of industrial redevelopment revenue bonds by Raleigh County, W. Va.
The SEC’s complaints, filed in federal courts in Georgia and West Virginia late last week but released Tuesday by the commission, seek to recover penalties and ill-gotten gains from Charles Aiken, 38, a Columbus, Ga. resident and Chalmer E. Detling 3d, 35, an attorney who lives in Marietta, Ga, stemming from fraudulent misrepresentations and omissions during the transaction.
Specifically, in the months leading up to the bonds’ issuance, Aiken and Detling failed to disclose to key participants — including the issuer, the underwriter, underwriter’s counsel and the trustee for the bondholders — material information about Aiken’s 2005 criminal indictment for financial fraud, according to the SEC’s complaints.