The Securities and Exchange Commission has shut down two illegally run mutual funds and the FBI seized records and data from the Linville Group, the company that ran the funds, according to a SEC official.
The SEC filed a complaint in U.S. District Court for the Western District of North Carolina and obtained a temporary restraining order against the Linville Group and James and Clifford Burton, the brothers who ran the two funds. The Burton brothers falsely promoted the Linville Group and its funds on its Web site, the SEC's complaint alleges. The Web site claimed the group was a "fully licensed institution," when, in fact, it is not licensed or registered. The brothers are accused of violating the antifraud and securities registration provisions of federal securities laws.