SEC v. Blackbird Capital Partners, Kelley and Shumway (ponzi schemes, 2016)

Judgment entered

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In November 2016 the SEC sued Blackbird Capital Partners, Andrew D. Kelley and Paul H. Shumway in Utah over an alleged $3.1 million Ponzi scheme. The court entered final judgments against Shumway in August 2018 and against Kelley and Blackbird in March 2019, ordering about $10.1 million in disgorgement and interest plus a $50,000 penalty. Kelley was separately sentenced to 84 months in a criminal case.

The record

What was ordered

Civil penalty

$50k

Disgorgement

$8.6m

Prejudgment interest

$1.5m

Total relief

$10.1m

Alleged gain

—

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The complaint, filed November 28, 2016, alleges that since at least September 2014 Kelley and Shumway solicited investors on the strength of Kelley's trading record and then used investor money to pay returns to earlier investors and for personal and business expenses.

Outcome. According to an SEC distribution plan filed in the case, the court entered a final judgment against Shumway on August 20, 2018 for $297,880.60 in disgorgement, $8,002.00 in prejudgment interest and a $50,000 civil penalty. On March 29, 2019 it entered final judgments against Kelley and Blackbird, jointly and severally, for $8,307,256 in disgorgement and $1,468,236.89 in prejudgment interest. The figures stored on this record add Shumway's amounts to the Kelley and Blackbird amounts. A later court memorandum decision on distributing the recovered money says Kelley pleaded guilty on April 18, 2017 and received an 84-month prison sentence in a separate criminal case. An SEC administrative order against a Blackbird sales agent, Gregory G. Young, adds that Kelley consented to an injunction in January 2017 with the amount of disgorgement left for later.

What the sources do not show: whether the amounts were collected in full (the plan reports roughly $2.4 million recovered from frozen accounts, to be returned to 67 harmed investors), or whether Shumway faced criminal charges.

This library tags the matter as ponzi schemes because the documents describe payments to earlier participants made from later participants' money. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

What technique is this, and how does it work?

This action is tagged with one technique in our taxonomy. The tagging is ours: regulators charge statutory provisions, not technique names, so the mapping is an editorial judgement described in our editorial policy.

• Ponzi schemes — see how it works, what statute it engages, and every other action tagged the same way.

Timeline

1. 2016-11-30 Litigation release published
2. 2018-08-20 Final judgment entered against Paul H. Shumway
3. 2019-03-29 Final judgments entered against Andrew D. Kelley and Blackbird Capital Partners
4. 2020-07-30 Court memorandum decision on distribution of recovered funds, noting Kelley's 84-month sentence
5. 2018-08-20 Final judgment entered against Paul H. Shumway
6. 2019-03-29 Final judgments entered against Andrew D. Kelley and Blackbird Capital Partners
7. 2020-07-30 Court memorandum decision on distribution of recovered funds, noting Kelley's 84-month sentence

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

• SEC litigation release
• SEC proposed distribution plan (court filing, Feb. 2020)
• Court order and memorandum decision (July 2020)
• SEC proposed distribution plan (court filing, Feb. 2020)
• Court order and memorandum decision (July 2020)

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Related actions

Other actions in the library sharing at least one technique tag with this one.

Record added September 10, 2026. submit a correction.