MILLIONS STOLEN FOR LUXURY CARS, JEWELS, AND GIRLFRIENDS!

SEC v. Frederick Tayton Dencer, Luke Abelard Dencer, Standard Holdings, Inc., et al. — U.S. Securities and Exchange Commission Litigation Release No. 26192, dated December 11, 2024.

The SEC charged Frederick Tayton Dencer, his son Luke Dencer, and their companies, Standard Holdings, Inc. and Standard Huaxia, Ltd., with defrauding investors out of over $17 million. The Dencers allegedly misappropriated millions to fund lavish lifestyles, sold non-existent stock, and made Ponzi-like payments. Dennis Edward Butler was charged with acting as an unregistered broker in the scheme.

In Plain English

Imagine you give money to someone to start a cool new business, like a streaming service for China. But instead of starting the business, they take your money and buy fancy cars, clothes, and go on vacations. They even lied about how much money they raised and where it was going, and sometimes paid old investors with money from new investors, like a pyramid scheme. The SEC stepped in to stop this and get money back for the people who were tricked.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Raising Funds for a Streaming Service From late 2017 to at least 2023, Frederick Tayton Dencer and his son Luke Dencer, through their companies Standard Holdings, Inc. and Standard Huaxia, Ltd., solicited over $17 million from at least 40 investors. They claimed the funds would be used to create a company providing streaming content to China via an app.
2. Selling Non-Existent Stock The Dencers and their companies allegedly sold investors shares of common stock and promissory notes. Crucially, the complaint states that they sold investors stock that had not actually been created or issued, a fundamental misrepresentation.
3. Misappropriating Investor Funds Instead of using the funds for the streaming business, the Dencers allegedly misappropriated more than $2.8 million. This money was used to fund their lavish lifestyles, including paying for home leases, luxury cars, designer clothes, jewelry, vacations, and cash withdrawals.
4. Making Ponzi-Like Payments The scheme involved making Ponzi-like payments to investors. This means that money from newer investors was used to pay returns or principal to earlier investors, creating a false impression of profitability and legitimacy.
5. Misleading Investors on Fund Safeguarding Investors were misled about the use of their money and how their investments were safeguarded. The Dencers allegedly made false and misleading statements about these funds being kept in segregated or trust accounts.
6. Unregistered Broker Solicitation From approximately April 2019 to mid-2022, Dennis Edward Butler allegedly acted as an unregistered broker. He solicited investors to put more than $2.3 million into the scheme, further facilitating the fraudulent activities.

The Enforcement Action

SEC charges Los Angeles-based Frederick Tayton Dencer, his son Luke Abelard Dencer, and their companies Standard Holdings, Inc. and Standard Huaxia, Ltd. with defrauding investors out of millions of dollars, which the Dencers allegedly misused and misappropriated to fund their lavish lifestyles. The SEC also charges Dennis Edward Butler with acting as an unregistered broker in connection with the scheme. The SEC’s complaint seeks permanent injunctions, civil penalties, disgorgement with prejudgment interest, and officer-and-director bars against the Dencers and their companies, and an injunction, disgorgement with prejudgment interest, and a civil penalty against Butler.

Named in this action: Frederick Tayton Dencer, Luke Abelard Dencer, Standard Holdings, Inc., Standard Huaxia, Ltd., Dennis Edward Butler.

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