SEC v. William B. McHenry Jr. and First South Investments, LLC (ponzi schemes, 2021)

Judgment entered

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In August 2021 the SEC sued Mississippi salesman William McHenry and First South Investments over unregistered sales of promissory notes in the Madison Timber Ponzi scheme. On August 17, 2022 the Southern District of Mississippi entered a default final judgment enjoining both under the registration provisions; the judgment shows no monetary award.

The record

What was ordered

Civil penalty

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Disgorgement

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Prejudgment interest

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Total relief

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Alleged gain

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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 SEC announced the complaint on August 27, 2021 (LR-25184) in the Southern District of Mississippi. The defendants promised 12 to 15% returns to finance timber harvesting rights that did not exist.

No field change; the tag is retained pending the lead's decision on unregistered sellers of third-party Ponzi products.

This library tags the matter as ponzi schemes because the document describes it as a scheme paying earlier investors with later investors' money. The tagging is ours, not the regulator's: agencies charge statutory provisions, not technique names.

Outcome: the final judgment (Document 20, filed August 17, 2022) recites that the defendants failed to defend, that the clerk entered default on January 31, 2022 and that the court denied a motion to vacate it. It permanently enjoins both defendants from violating Sections 5(a) and (c) of the Securities Act and Section 15(a) of the Exchange Act and orders no disgorgement or penalty on its face. The Commission's September 26, 2023 order (Exchange Act Release 98520) confirms the judgment and bars both from association with brokers, dealers and advisers and from penny stock offerings; it says McHenry earned about $3.7 million in commissions from the scheme, which is the order's finding, not a monetary award.

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. 2021-08-27 Litigation release published
2. 2022-08-17 Default final judgment entered (S.D. Miss.)
3. 2023-09-26 Commission order bars McHenry and First South (Release 34-98520)

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
• Final judgment (Doc. 20, Aug. 17, 2022)
• SEC Order, Exchange Act Release 98520 (Sept. 26, 2023)

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.

Same matter

The library links these 2 records because they appear to concern one matter: the same lead defendant, an overlapping technique tag and close filing dates, or a shared court docket or a release that cites the other. Records are listed by date filed.

This grouping is the library's, made by matching names, techniques, dates and citations when the site is built. It is not the regulator's or a court's determination that the records are one case, and it errs towards missing a link rather than making a false one.

Related actions

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

Record added September 10, 2026. submit a correction.