Litigation Releases (Theodore Miller, et al.)

Theodore Miller, et al.

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 26096 / September 5, 2024

Securities and Exchange Commission v. Theodore Miller, et al.,

No. 2:24-cv-00479, S.D. W. Va. filed Sept. 4, 2024)

SEC Charges TikToker Teddy Miller and Two of His Companies for Fraud

The Securities and Exchange Commission yesterday charged West Virginia resident Theodore "Teddy" Miller and his companies, Bear Industries, LLC and Bear Investments and Business Consulting, LLC (collectively "Bear Entities"), for operating two unregistered, fraudulent real estate schemes that raised approximately $370,000 from approximately 170 investors in the U.S. and abroad, many of whom followed Miller on TikTok and other social media platforms. The SEC also named Miller's mother, Deanna Drumm, as a relief defendant to seek disgorgement of ill-gotten investor funds that she received.

According to the SEC's complaint, in the first fraudulent scheme known as the Bear-Lute program, Miller pooled investor funds to invest in various real estate projects, while the second scheme solicited investments for specific real estate projects. The SEC alleges that Miller assured investors that their investments would be safe, secure, and generate high returns, and that investors could withdraw their funds 60 days after making a written request. In reality, the complaint alleges that Miller never owned the underlying properties that purportedly secured the investments, and Miller falsely continued to claim that investors received over 20% annual returns even as he and the Bear Entities consistently and repeatedly ignored investors' withdrawal requests. Instead, the complaint alleges that Miller used the majority of investor funds to fund a lavish lifestyle that he promoted on TikTok, depicting himself as a millionaire real estate developer traveling around the world. In his social media posts, he boasted repeatedly that his investors are "making crazy f***king money." According to the complaint, Miller's colorful persona was a calculated fraud.

The SEC's complaint, filed in the U.S. District Court for the Southern District of West Virginia, charges Miller, Bear Industries, and Bear Investments and Business Consulting with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also charges the defendants with violating the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act. The complaint seeks from each defendant permanent injunctive relief including conduct-based injunctions, disgorgement of ill-gotten gains with prejudgment interest, and civil penalties. The complaint also names Drumm as a relief defendant and seeks to disgorge from Drumm investor funds to which she had no legitimate claim.

In a parallel action, the U.S. Attorney's Office for the Southern District of West Virginia filed criminal charges against Miller.

The SEC's investigation was conducted by Catherine Floyd, Ty Martinez, and Jamie Haussecker of the Fort Worth Regional Office under the supervision of Jim Etri and B. David Fraser. The litigation will be led by Tyson Lies and supervised by Keefe Bernstein.

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