A company offering allegedly fraudulent and unregisteredcertificates of deposits under the name Her Majesty's Credit Unionwas recently hit with a legal complaint from the SEC.

According to the Nov. 8 complaint filed in the U.S. DistrictCourt for the District of Colorado, from 2008 through September2012, Stanley B. McDuffie, HMCU and its website allegedly targetedinvestors by offering CDs with above-market rates.

In its recent complaint, the SEC said HMCU is actually the tradename of a for-profit corporation that is controlled byMcDuffie.

Instead of investing or loaning CD deposits, the SEC saidMcDuffie and HMCU deposited investor funds into financialinstitution accounts held by HMCU, and then allegedlymisappropriated the funds for personal and business expenses,causing investors to lose most of their principal and rendering itimpossible for HMCU to make required interest payments.

The SEC said McDuffie made misleading statements saying HMCU wasa secure credit union that was regulated and that it held insurancecovering investor deposits.

McDuffie has several aliases including Stanley Roberson andStanley Battle, according to the SEC.

The U.S. Virgin Islands-based entity has come under scrutinyfrom the NCUA and other regulators over the past few years.

In December 2010, a Colorado judge sentenced Roberson to six months in jail for not complying with asubpoena by Colorado officials investigating the credit union'ssales of certain securities.

In June 2011, the NCUA prohibited Roberson from any future work at any federallyinsured financial institution.

HMCU has never been a federally or state-chartered credit union,has never been regulated as a credit union by any governmentauthority, has never held insurance covering its investor deposits,and has never been insured by Lloyd's of London as it has claimed,according to the SEC.

In addition to charging McDuffie with engaging in schemes todefraud and violating sections of the Securities Act, the SEC hasalso charged him with offering and selling unregistered securities,obtaining money or property on the basis of misleading statementsand omission, and making misleading statements and omissions.

The SEC said it is asking the court for relief in the form of afinding that the defendants committed the violations and thatunless restrained will continue to do so. The agency has alsosought an injunction to permanently restrain and enjoin thedefendants from violating the laws as alleged against them in theSEC complaint and order the defendants to disgorge any and allillegal gains and pay civil money penalties, as well as any otherrelief the court may deem appropriate.