PRESS RELEASE
FAIRY TALE COMES TO END WITH APPOINTMENT OF RECEIVER FOR STORYBOOK DEFENDANTS
 
For Immediate Release
Wednesday, October 07, 2009 
 
Contact: Irving Faught, Administrator
  Oklahoma Department of Securities
  405-280-7700
 
 
Oklahoma City/////  Today, Oklahoma County District Court Judge Noma Gurich appointed a receiver over the assets of Storybook Properties, LLC, Storybook Investments WA, LLC, Matthew G. Story and their affiliates. The judge’s action was based on an emergency request by the Oklahoma Department of Securities. The judge named Oklahoma City attorney Stephen Moriarity as receiver to take immediate control of, and to operate and manage, all of the defendants’ assets located in the state of Oklahoma, and all other assets belonging to the defendants, wherever located, if paid for with Oklahoma investor funds. The Department previously filed a civil action against the defendants alleging the fraudulent sale of unregistered investment notes. At that time, the Court ordered the defendants to stop all offers and sales of the securities. Oklahoma residents invested more than $6,000,000 in the notes.

The Department sought the appointment of a receiver after learning that investors were recently notified by Matthew Story that the defendants did not have the funds to make the promised interest payments. “Court documents filed by the Department alleged that the Storybook defendants were operating a Ponzi scheme. The recent notification to investors evidences the fact that the defendants’ ability to make principal and interest payments to their investors was dependent upon taking in money from other investors,” said Irving L. Faught, Administrator of the Department of Securities.

As part of their solicitation, the defendants guaranteed an investment return, over a five year period, at a high fixed rate. The investments were purportedly “over-collateralized” by real estate located primarily in Tulsa County. However, further investigation by the Department revealed that the investments of many investors are under-collaterized, if collaterized at all; that certain of the properties that the defendants represent to be security or collateral for investments are not owned by the defendants; and that the investments of multiple investors are secured by the same property the value of which is dramatically less than the cumulative amount of the investments purportedly secured by such property. In certain instances, the defendants did not record deeds or mortgages that were necessary to secure investments.

“This matter provides a textbook illustration of the need for a receiver in a securities fraud case,” said Faught. “The primary reason for the appointment of a receiver is to maintain the status quo while all the transactions are unraveled by the receiver.”

The Department's suit against the Storybook defendants seeks restitution for investors, a civil penalty, and an injunction against further offers or sales of securities in or from the state of Oklahoma.

The Department of Securities is charged with administration and enforcement of the Oklahoma Securities Act. The Department investigates securities fraud, the offer or sale of unregistered securities, and the sales practices of stockbrokers and investment advisers. The Administrator may seek administrative or civil sanctions against any person who violates state securities regulations and, when appropriate, make criminal referrals.
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This press release, and related information, is available on the Securities Commission's web site at securities.ok.gov, by phone at (405) 280-7700, or in writing at:  Oklahoma Securities Commission, 204 North Robinson, Suite 400, Oklahoma City, OK 73102.