BOARD OF GOVERNORS OF THE FEDERAL RESERVE SYSTEM WASHINGTON, D. C.  20551
			DIVISION OF BANKING SUPERVISION AND REGULATION
			SR 01-26 November 1, 2001

	TO THE  OFFICER IN CHARGE OF SUPERVISION AND APPROPRIATE SUPERVISORY AND EXAMINATION STAFF AT EACH FEDERAL RESERVE BANK AND TO EACH DOMESTIC BANKING ORGANIZATION SUPERVISED BY THE FEDERAL RESERVE SUBJECT:   SEC Action Against Robert L. Bentley, Bentley Financial Services, and Entrust Group                       The purpose of this SR letter is to inform Reserve Banks and state member banks about an enforcement action that was recently taken by the SEC against Robert L. Bentley and his companies, Entrust Group and Bentley Financial Services (collectively, "Bentley").  The action alleges that Bentley is committing fraud in the sales of securities to financial institutions, including banks, thrifts and credit unions, and to individual investors.  In particular, the SEC alleges that Bentley is representing to investors that it is selling bank-issued federally insured certificates of deposit when, in the opinion of the SEC, Bentley is selling uninsured and unregistered securities.  The SEC also charges that in many cases old investors were repaid with new investors' funds.                       On October 24, 2001, the SEC obtained a federal court order freezing Bentley's assets and appointing a receiver to take possession of its assets.1  The order states in principal part: "... Any bank, financial or brokerage institution or other person or entity holding any funds, securities or other assets in the name of, for the benefit of, or under the direct or indirect control of defendants Robert L. Bentley, Bentley Financial Services, Inc, Entrust Group, or their officers, directors, or those persons in active concert or participation with them, and each of them, shall hold and retain within their control and prohibit the withdrawal, removal, transfer or other disposal of any such funds or other assets of defendants;..."                       All state member banks that have any active business relationship with Bentley, whether as an investor or issuer of certificates of deposit, should contact the appropriate Reserve Bank with detailed information regarding the amount and terms of the applicable investment instrument.  In addition, all state member banks that hold any funds, securities or other assets in the name of or for the benefit of Bentley are advised to take the steps necessary to comply with the federal court order.  Further, all state member banks that have invested funds through Bentley are advised to confer with counsel about the appropriate course of action for their organizations, including contacting the court-appointed receiver about their investments. The order appoints David H. Marion, Esq., with the firm of McCraken, Walker & Rhodas LLP as the receiver.  The receiver may be reached at 215-772-7434.                        Reserve Banks are asked to distribute this SR letter to all state member banks and to supervisory staff in their Districts.  Any questions may be addressed to Tom Keady, Manager (202/728-5885), Joan Wolff, Senior Attorney (202/728-5881), or Vitus Ukwuoma, Supervisory Financial Analyst (202/452-3163). Richard Spillenkothen Director Note: 1.  A copy of the SEC’s press release can be obtained on the SEC website at www.sec.gov/litigation/litreleases/lr17201.htm.   Return to text
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