In the Matter of Michael W. Crow

Michael Crow (defendant) founded Duncan Capital LLC and changed its name to Duncan Capital Group (collectively, Duncan Capital Group) (defendants). Duncan Capital Group assisted small-cap companies in raising capital. Crow controlled the firm’s operation and management. The firm was not registered with the Securities and Exchange Commission (SEC) (plaintiff). A month after the name change, Crow and another individual created Duncan Capital LLC (Duncan Capital) (defendant), which merged with a registered broker-dealer. The SEC filed a complaint against Crow, Duncan Capital Group, Duncan Capital, and others, alleging that Crow unlawfully acted as an unregistered principal of Duncan Capital and that Duncan Capital’s regulatory filings omitted that Crow controlled the company’s operations and had been enjoined from violating the anti-fraud provisions of the securities laws and sanctioned. After a bench trial, the district court issued findings of fact, conclusions of law, and a final judgment finding that Crow aided and abetted violations of the securities laws’ registration provisions. The court found that Crow was associated with Duncan Capital, which was a registered broker-dealer; Crow was unregistered but oversaw Duncan Capital’s brokerage activities and received the bulk of its profits; Duncan Capital was the placement agent for about 20 securities offerings and raised over $100 million for issuers; Crow received millions in cash compensation and warrants; Crow owned and managed an investment adviser; and Crow did not acknowledge wrongdoing, had already been enjoined, had breached his consent agreement with the SEC, disregarded the advice of counsel, concealed what he was doing, acted with scienter, and perjured himself. The court enjoined Crow from violating the registration provisions of the federal securities laws and ordered Duncan Capital and Duncan Capital Group to pay disgorgement and Crow to pay a civil monetary penalty. The SEC issued an order instituting proceedings based on the district court’s final judgment and moved for summary disposition as to Crow.