Capital Consultants, LLC, Jeffrey L. Grayson, and Barclay L. Grayson

On September 21, 2000, the SEC obtained a preliminary injunction against Capital Consultants, LLC, a registered investment adviser that managed more than $1 billion, and its principals Jeffrey L. Grayson and his son Barclay L. Grayson. The SEC alleged the defendants employed a Ponzi-like scheme to cover-up enormous losses from several bad loans. For more information about the SEC's action, you can read Litigation Release No. 16720 (Sept. 21, 2000).

The Court appointed Thomas F. Lennon as Receiver. He has essentially wound down the business by selling private and public investments and real property.  The Receiver has made two interim distributions.  In July 2003, approximately $74 million was distributed to CCL investors, including certain traced dividends.  The Receiver also distributed approximately $838,000 to trade creditors and lenders.  The first interim distribution was made from non-litigation Receivership assets only, primarily the loan portfolio sales proceeds.

In December 2003, once all conditions and impediments to the release of the Settlement Funds were satisfied or removed, the Receiver distributed an additional $68 million to investors.  Including the value of the previous interim distributions of real estate, approximately $168 million has been distributed to date.  The Receiver is holding an additional $76 million as a reserve for administrative expenses, appeal issues, claim disputes, and future third party recoveries.  The pending appeals have been scheduled for oral argument in July 2004.  The Receiver anticipates making another significant distribution once a decision is issued on the appeals, probably in the fourth quarter of this year.

Mr. Lennon has filed three interim reports with the Court. If you want to obtain the reports or have questions, you can contact the Receiver at:

Thomas F. Lennon, Inc.
7777 Alvarado Road, Suite 712
La Mesa, CA 91941
Phone: (619) 668-6680
Fax: (619) 465-9288

http://www.sec.gov/divisions/enforce/claims/capconsult.htm