UNITED STATES OF AMERICA

Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 83779 / August 6, 2018

INVESTMENT COMPANY ACT OF 1940

Release No. 33190 / August 6, 2018

ADMINISTRATIVE PROCEEDING
File No. 3-18623
ORDER INSTITUTING ADMINISTRATIVE
In the Matter of AND CEASE-AND-DESIST PROCEEDINGS,
PURSUANT TO SECTIONS 15(b) AND 21C
GREGORY G. YOUNG OF THE SECURITIES EXCHANGE ACT OF
1934 AND SECTION 9(b) OF THE
Respondent. INVESTMENT COMPANY ACT OF 1940,
MAKING FINDINGS, AND IMPOSING
REMEDIAL SANCTIONS AND A CEASE-
AND-DESIST ORDER

I.

The Securities and Exchange Commission (“Commission”) deems it appropriate and in the
public interest that public administrative and cease-and-desist proceedings be, and hereby are,
instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 (“Exchange
Act”) and Section 9(b) of the Investment Company Act of 1940 (“Investment Company Act”)
against Gregory G. Young (“Young” or “Respondent”).

II.

In anticipation of the institution of these proceedings, Respondent has submitted an Offer

of Settlement (the “Offer”) which the Commission has determined to accept. Solely for the
purpose of these proceedings and any other proceedings brought by or on behalf of the
Commission, or to which the Commission is a party, and without admitting or denying the findings
herein, except as to the Commission’s jurisdiction over him and the subject matter of these
proceedings, which are admitted, and except as provided herein in Section V, Respondent consents
to the entry of this Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to
Sections 15(b) and 21C of the Securities Exchange Act of 1934 and Section 9(b) of the Investment
Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-
Desist Order (“Order”), as set forth below.
 III.

On the basis of this Order and Respondent’s Offer, the Commission finds1 that

Summary

These proceedings arise out of Respondent Young’s participation as an unregistered broker-

dealer in the offer and sale of securities of Blackbird Capital Partners, LLC (“Blackbird”) in
interstate commerce. On November 28, 2016, the Commission filed an emergency injunctive action
in federal district court charging Blackbird and its principals, Andrew D. Kelley (“Kelley”) and Paul
H. Shumway (“Shumway”) with securities fraud. SEC v. Blackbird Capital Partners, LLC, et al.,
Civil Action No. 2:16-cv-01199-TC (D. Utah).

Blackbird’s principals, Kelley and Shumway, solicited individuals to invest money with
Blackbird, an entity that was registered as a Commodity Trading Advisor and/or through separate
“Family and Friends” accounts, which they claimed Kelley managed as proprietary trading funds.
Young, acting as an unregistered sales agent of Blackbird, offered and sold Blackbird’s securities to
investors and earned transaction-based compensation, in the form of ownership interest in a limited
liability company, from each sale.

Respondent

1. Gregory G. Young, age 40, is a resident of Herriman, Utah. Young was an investor
in Blackbird Capital Partners, LLC, an entity that purported to hold funds for investors and trade
securities for profit. Young is not and has never been registered with the Commission in any
capacity and does not hold any securities licenses. From at least May 2016 to November 2016,
Young engaged in the business of identifying, soliciting, and communicating with potential
investors to solicit and facilitate the purchase of securities. By engaging in this conduct and
receiving transaction-based compensation therefrom, Young acted as an unregistered broker.
Young participated in an offering of Blackbird’s stock, which is a penny stock.

Other Relevant Entities

2. Blackbird Capital Partners, LLC was formed as a Nevada limited liability

company on July 15, 2013. Blackbird registered as a foreign LLC in Utah on July 1, 2015, but
failed to file renewal as of October 26, 2016. Blackbird was registered as a member with the
National Futures Association (“NFA”), approved on July 10, 2015, but its membership was

1
The findings herein are made pursuant to Respondent's Offer of Settlement and are not
binding on any other person or entity in this or any other proceeding.

2
withdrawn on September 4, 2016. Blackbird’s business registration expired on October 26, 2016
for failure to file a renewal.

3. Andrew D. Kelley (“Kelley”), age 42, was a resident of Draper, Utah, and is
currently incarcerated in federal prison. Kelley was a founder and manager of Blackbird, is not
registered with the Commission in any capacity, and does not hold any securities licenses. On
January 31, 2017, Kelley consented to the entry of a judgment in SEC v. Blackbird, Case No.
2:16cv01199-TC (D. Utah), without admitting or denying the allegations of the complaint. The
judgment enjoined Kelley from violating Section 17(a) of the Securities Act and Section 10(b) of
the Exchange Act and Rule 10b-5 thereunder, and ordered disgorgement in an amount yet to be
determined.

Background

4. In or around the spring of 2015, Young was introduced to Blackbird and its
principal, Andrew Kelley. Kelley claimed that he had an expertise in trading and that he traded on
behalf of others through his entity, Blackbird. Kelley represented that his trading had historically
produced substantial rates of return. Young decided to invest money with Blackbird. During the
following year, Kelley represented that Young’s investment with Blackbird had made substantial
profits, and Young invested additional funds with Blackbird.2

5. Blackbird also engaged Young as a salesperson to obtain additional investors in

Blackbird’s securities. Young represented to potential investors that their money would be put into
an account that would be traded by Kelley. Young represented that Kelley was an expert trader
with a history of earning substantial returns, and that profits would be earned solely through
Kelley’s efforts of effecting transactions in securities in the investors’ accounts.

6. As compensation for raising funds for Blackbird, Young received a partnership

interest in a new entity, TradeTech Holdings, LLC, which was formed to trade securities for profit.
From approximately spring 2015 to November 2015, Young raised over $1.5 million from at least
twelve investors and received a 5% interest in the new entity. Young’s compensation was based
on the amount of money invested in each transaction facilitated by Young.

7. While acting as an unregistered broker, Young identified, contacted, and

communicated with potential investors and acted as an intermediary in negotiations between
Blackbird and potential investors by relaying terms of the deals between them. Young contacted
investors and potential investors through the use of telephone and/or email and accepted funds
from investors into his own accounts and then pooled investor funds to invest them in Blackbird
from his accounts in his own name.

2
Young ultimately lost a significant amount of funds through his investment with
Blackbird.
3
 8. In performing the above-described conduct, Young received transaction-based
compensation.

9. On November 28, 2016, the Commission obtained a temporary restraining order

and asset freeze against Blackbird, Kelley, and Shumway, based on evidence that they fraudulently
collected at least $3.1 million from investors through the use of falsified documents and material
misrepresentations and omissions regarding the amount of funds controlled by Blackbird, the use
of investor funds, and the past performance and expected profitability and safety of invested
funds.3

10. After learning about Blackbird and Kelley’s fraud, Young made efforts to repay
investors from whom he had raised funds.

11. As a result of the conduct described above, Young willfully violated Section
15(a)(1) of the Exchange Act, which makes it unlawful for any broker or dealer to use the mails or
any means of interstate commerce to “effect any transactions in, or to induce or attempt to induce
the purchase or sale of, any security” unless that broker or dealer is registered with the
Commission in accordance with Section 15(b) of the Exchange Act.

IV.

In view of the foregoing, the Commission deems it appropriate and in the public interest to
impose the sanctions agreed to in Respondent Young’s Offer.

Accordingly, pursuant to Sections 15(b) and 21C of the Exchange Act Section 9(b) of the
Investment Company Act, it is hereby ORDERED that:

A. Respondent Young cease and desist from committing or causing any violations and
any future violations of Section 15(a)(1) of the Exchange Act.

B. Respondent Young be, and hereby is:

barred from association with any broker, dealer, investment adviser, municipal securities
dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization;

prohibited from serving or acting as an employee, officer, director, member of an advisory

board, investment adviser or depositor of, or principal underwriter for, a registered investment
company or affiliated person of such investment adviser, depositor, or principal underwriter; and

3
On October 5, 2017, Kelley pled guilty to securities fraud in the criminal case, U.S. v.
Kelley, Case No. 2:16cr00630-001 (D. Utah). Kelley was ordered to pay $7,965,523.58 in
restitution and is currently serving a seven-year prison sentence.
4
 barred from participating in any offering of a penny stock, including: acting as a promoter,
finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer
for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the
purchase or sale of any penny stock;

with the right to apply for reentry after five (5) years to the appropriate self-regulatory
organization, or if there is none, to the Commission.

C. Any reapplication for association by the Respondent will be subject to the

applicable laws and regulations governing the reentry process, and reentry may be conditioned
upon a number of factors, including, but not limited to, the satisfaction of any or all of the
following: (a) any disgorgement ordered against the Respondent, whether or not the Commission
has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the
conduct that served as the basis for the Commission order; (c) any self-regulatory organization
arbitration award to a customer, whether or not related to the conduct that served as the basis for
the Commission order; and (d) any restitution order by a self-regulatory organization, whether or
not related to the conduct that served as the basis for the Commission order.

D. Respondent Young shall, within 10 days of the entry of this Order, pay a civil
money penalty in the amount of $5,000 to the Securities and Exchange Commission. The
Commission may distribute civil money penalties collected in this proceeding if, in its discretion,
the Commission orders the establishment of a Fair Fund pursuant to 15 U.S.C. § 7246, Section
308(a) of the Sarbanes-Oxley Act of 2002, as amended. The Commission will hold funds paid
pursuant to this paragraph in an account at the United States Treasury pending a decision whether
the Commission, in its discretion, will seek to distribute funds or, subject to Exchange Act Section
21F(g)(3), transfer them to the general fund of the United States Treasury. If timely payment is not
made, additional interest shall accrue pursuant to 31 U.S.C. §3717.

Payment must be made in one of the following ways:

(1) Respondent may transmit payment electronically to the Commission, which

will provide detailed ACH transfer/Fedwire instructions upon request;

(2) Respondent may make direct payment from a bank account via Pay.gov
through the SEC website at http://www.sec.gov/about/offices/ofm.htm; or

(3) Respondent may pay by certified check, bank cashier’s check, or United
States postal money order, made payable to the Securities and Exchange
Commission and hand-delivered or mailed to:

Enterprise Services Center

Accounts Receivable Branch
HQ Bldg., Room 181, AMZ-341
6500 South MacArthur Boulevard

5
 Oklahoma City, OK 73169

Payments by check or money order must be accompanied by a cover letter identifying

Gregory G. Young as a Respondent in these proceedings, and the file number of these proceedings;
a copy of the cover letter and check or money order must be sent to Daniel J. Wadley, Acting
Regional Director, Division of Enforcement, Securities and Exchange Commission, 351 S. West
Temple Street, Suite 6.100, Salt Lake City, UT 84101.

E. Amounts ordered to be paid as civil money penalties pursuant to this Order shall be
treated as penalties paid to the government for all purposes, including all tax purposes. To
preserve the deterrent effect of the civil penalty, Respondent agrees that in any Related Investor
Action, he shall not argue that he is entitled to, nor shall he benefit by, offset or reduction of any
award of compensatory damages by the amount of any part of Respondent’s payment of a civil
penalty in this action ("Penalty Offset"). If the court in any Related Investor Action grants such a
Penalty Offset, Respondent agrees that he shall, within 30 days after entry of a final order granting
the Penalty Offset, notify the Commission's counsel in this action and pay the amount of the
Penalty Offset to the Securities and Exchange Commission. Such a payment shall not be deemed
an additional civil penalty and shall not be deemed to change the amount of the civil penalty
imposed in this proceeding. For purposes of this paragraph, a "Related Investor Action" means a
private damages action brought against Respondent by or on behalf of one or more investors based
on substantially the same facts as alleged in the Order instituted by the Commission in this
proceeding.

V.
It is further Ordered that, solely for purposes of exceptions to discharge set forth in Section
523 of the Bankruptcy Code, 11 U.S.C. §523, the findings in this Order are true and admitted by
Respondent, and further, any debt for disgorgement, prejudgment interest, civil penalty or other
amounts due by Respondent under this Order or any other judgment, order, consent order, decree
or settlement agreement entered in connection with this proceeding, is a debt for the violation by
Respondent of the federal securities laws or any regulation or order issued under such laws, as set
forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. §523(a)(19).

By the Commission.

Brent J. Fields
Secretary