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Russillo’s, LLC and Brandon Scott Russell - S-10-022-10-FO01 - Final Order
On December 21, 2010, the Director of the State of Washington Department of Financial Institutions entered a Final Order against Respondents, Russillo’s, LLC and Brandon Scott Russell (“Russell”). The Order stated that Respondents had each failed to appear for a Prehearing Conference on September 16, 2010. Respondents were each subject to an Initial Order of Default that was entered on September 22, 2010 by Administrative Law Judge Terry A. Schuh. The Final Order ordered Respondents to cease and desist from any further violations of RCW 21.20.010, RCW 21.20.040 and RCW 21.20.140. The Final Order also ordered Russell to pay investigative costs of $2,500. Respondents each have the right to petition the superior court for judicial review of the order.
EQlibrium Corporation, Prime Assets LLC, Paul M. Martinez and Louis A. Pugliese III - S-07-398-10-SC01 - Statement of Charges
On December 17, 2010, the Securities Division entered a Statement of Charges against Respondents, EQlibrium Corporation (“EQlibrium”), Prime Assets LLC, Paul M. Martinez and Louis A. Pugliese III. The Securities Division alleged that EQlibrium, which has its principal place of business in Seattle, Washington, is in the business of offering and selling real estate investments and is the managing member of Prime Assets LLC. The Securities Division alleged that from 2007 through 2009, Respondents offered and sold more than $4,800,000 worth of membership interests in Prime Assets LLC for a marina development project and that EQlibrium and Pugliese made an Internet offering of promissory note and deed of trust investments. The Securities Division alleged that Respondents violated the anti-fraud provision and the registration provisions of the Securities Act of Washington and gave notice of its intent to seek investigative costs. Respondents each have the right to request a hearing on the Statement of Charges.
A Consent Order was entered in this matter on February 22, 2011.
National Strategic Investment Corporation; Real Investor Mortgage, Inc.; Starlie, LLC; Charles W. Williams; Steven M. Hettema - S-07-294-10-SC01 - Statement of Charges
On December 17, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Issue an Order to Cease and Desist, Impose Fines, and Recover Costs against National Strategic Investment Corporation (“NSIC”); Real Investor Mortgage, Inc. (“RIM”); Starlie, LLC; Charles W. Williams; and Steven M. Hettema (collectively “Respondents”). NSIC was a Washington corporation that hosted educational courses regarding investment alternatives, with a focus on real estate investing. NSIC also managed an investor club with several locations in Washington and neighboring states. The Division alleges that Respondents raised a total of $876,834 by selling investments to members of the investor club located in Port Orchard. The Division alleges that Respondents sold investments in the purchase and remodel of a commercial building, and also investments in the form of promissory notes and promissory notes convertible to stock, the proceeds which were to be used to expand the NSIC and RIM businesses. The Division further alleges that Respondents offered and sold unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division ordered Respondents to cease and desist from violating the securities registration, broker-dealer and/or securities salesperson registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division gave notice of its intent to collect fines and charge costs. Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order was entered regarding this matter on August 22, 2011.
Tradeology.com, Inc.; Traderight Corp. dba Traderight Securities, Inc.; Jygnesh Rohit Patel - S-08-211-10-FO01 - Final Order
On December 14, 2010, the Securities Division entered a Final Order to Cease and Desist, Impose Fines, and Recover Costs against Tradeology.com, Inc. and Jygnesh Rohit Patel. The Division previously entered a Statement of Charges against Tradeology.com, Inc., Traderight Corp. dba Traderight Securities, Inc., and Jygnesh Rohit Patel (collectively “Respondents”) on August 26, 2010. The Statement of Charges alleges that approximately ten Washington residents were sold stock in Tradeology.com, Inc., a start-up online stock trading company located in Florida. Subsequently, Respondent Patel told the residents that he arranged for their stock in Tradeology.com, Inc. to be exchanged for stock in Traderight Securities, a company he had acquired. It is believed that this exchange never occurred. After Tradeology.com, Inc. went out of business, Respondent Patel presented two additional stock offerings to at least two of the residents as a means to recoup losses incurred from their investment in the company. The Statement of Charges further alleges that certain Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provision of the Securities Act of Washington. The Securities Division orders Respondents Tradeology.com, Inc. and Jygnesh Rohit Patel to cease and desist from violating the Securities Act of Washington, orders Respondent Patel to pay a fine of $10,000, and orders Respondent Tradeology.com, Inc. to pay a fine of $5,000. The Securities Division also orders Respondents Tradeology.com, Inc. and Jygnesh Rohit Patel to pay investigative costs of $2,000. Respondents Tradeology.com, Inc. and Jygnesh Rohit Patel have the right to request judicial review of this matter.
Meridian Mortgage Investors Fund V, LLC, Meridian Mortgage Investors Fund VI, LLC, Meridian Mortgage Investors Fund VII, LLC, Meridian Mortgage Investors Fund VIII, LLC, Meridian Mortgage Investors Fund IX, LLC, Meridian Mortgage Investors Fund X, LLC, and Meridian Real Estate Opportunity Fund I, LLC - S-10-250-10-CO02 - Consent Order
On December 3, 2010, the Securities Division entered into a Consent Order with Meridian Mortgage Investors Fund V, LLC, Meridian Mortgage Investors Fund VI, LLC, Meridian Mortgage Investors Fund VII, LLC, Meridian Mortgage Investors Fund VIII, LLC, Meridian Mortgage Investors Fund IX, LLC, Meridian Mortgage Investors Fund X, LLC, and Meridian Real Estate Opportunity Fund I, LLC (collectively, “Respondents”). The Securities Division previously entered a Statement of Charges on September 10, 2010 against Respondents and others, alleging multiple violations of the Securities Act of Washington in the Meridian Mortgage Investors Funds matter. Without admitting or denying the allegations, Respondents agreed to cease and desist from violating the Securities Act of Washington. Respondents each further agreed to pay a fine of $25,000 and to pay the Securities Division’s investigative costs once all investors in Respondents and CS Note Holdco, LLC have been repaid in full. Respondents waived their rights to a hearing and to judicial review of this matter.
Columbia City Cinema, Inc.; Paul Doyle - S-10-424-10-SC01 - Stop Order and Statement of Charges
On December 2, 2010, the Securities Division entered a Stop Order Denying Effectiveness of Application for Registration and Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Charge Costs against Columbia City Cinema, Inc. (“CCC, Inc.”) and Paul Doyle (“Doyle”) (collectively, “Respondents”). CCC, Inc. operates a “3-screen neighborhood cinema showing first run movies” in Seattle. The Order alleges that the registration statement filed on behalf of CCC, Inc. is incomplete in a material respect or contains statements which are false or misleading. Among other things, CCC, Inc. failed to adequately describe the risks involved in investing in CCC, Inc. and did not address the promissory notes issued by its predecessor company, Columbia City Cinema, LLC. The Order further alleges that Respondents offered CCC, Inc. stock through its website and a news story on King 5 News. The Order alleges that Respondents offered unregistered securities and violated the anti-fraud provisions of the Securities Act of Washington. The Order also alleges that Respondent Doyle acted as an unregistered securities salesperson or broker-dealer. The Securities Division intends to order Respondents to cease and desist from violating the Securities Act of Washington, and gives notice of its intent to impose fines and charges costs. Respondents have a right to request a hearing on the Order.
Slade E. Barnett, Jr. and Capital Plus Advantage Group, LLC, d/b/a Equity Plus Homes - S-06-043-10-CO01 - Consent Order
On November 24, 2010, the Securities Division entered into a Consent Order with Slade E. Barnett, Jr. and Capital Plus Advantage Group, LLC, d/b/a Equity Plus Homes (collectively “Respondents”). The Securities Division previously entered a Statement of Charges against the Respondents on September 22, 2009. The Statement of Charges alleged that in 2004, the Respondents raised at least $190,000 by offering and selling promissory notes and representing to investors that they would earn returns of 36% per year through their investment program which featured foreign currency trading (forex). The Statement of Charges alleged that the Respondents violated the registration and anti-fraud provisions of the Securities Act of Washington. In settling the matter, the Respondents neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act of Washington. Respondent Barnett agreed to pay investigative costs of $5,000 and a fine of $1,000. The Respondents waived their right to a hearing and judicial review of the matter.
Jeffrey Beard; Harvest Wind Energy Corp.; Tapemorr, LLC - S-08-138-10-FO01 - Final Order
On November 17, 2010, the Securities Division entered a Final Order against Jeffrey Beard; Harvest Wind Energy Corp.; and Tapemorr, LLC (collectively “Respondents”). The Securities Division had previously issued a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Charge Costs in this matter on September 29, 2010. The Statement of Charges alleged that Respondents offered and sold investments in the form of stock or promissory notes. The Statement of Charges further alleged that Respondents offered unregistered securities, acted as unregistered broker-dealer or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division orders Respondents to cease and desist from violating the Securities Act of Washington, and orders Jeffrey Beard to pay a fine of $10,000 and investigative costs of $5,000. Respondents have a right to request judicial review of the Final Order.
bVisual, S.A.; bVisual Group, Ltd.; Stephan Anthony Larson; Kenneth Neal - S-09-382-10-CO01 - Consent Order
On November 17, 2010, the Securities Division entered into a Consent Order with bVisual, S.A.; bVisual Group, Ltd.; Stephan Anthony Larson; and Kenneth Neal. The Securities Division had previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Revoke Exemptions, Impose Fines, and Recover Costs (“Statement of Charges”) against Respondents bVisual, S.A. (“bVisual, S.A.”); bVisual Group, Ltd. (“bVisual Group”); Stephan Anthony Larson (“Larson”); Kenneth Neal (“Neal”); Stephen Klos (“Klos”); and Brian Larson (“Brian Larson”). bVisual, S.A. and bVisual Group are in the business of developing and marketing an “audio-video screen-sharing service” that allows multiple people to connect, see and hear each other through their computers. The Statement of Charges alleged that Respondents Larson, Neal and Klos raised approximately $2,250,000 by offering and selling stock in bVisual, S.A. to approximately ninety-eight investors. The Statement of Charges also alleged that Respondents Larson, Neal and Klos raised approximately $950,000 by offering and selling stock in bVisual Group to approximately twenty-nine investors. The Statement of Charges further alleged that Respondents bVisual, S.A.; bVisual Group; Larson; Neal; and Klos violated the securities registration and anti-fraud provisions of the Securities Act of Washington, and that Respondents bVisual Group and Brian Larson violated RCW 21.20.350 by making a false filing with the Securities Division. Without admitting or denying the allegations, Respondents bVisual, S.A.; bVisual Group; Larson; and Neal agreed to cease and desist from violating the Washington Securities Act, to reimburse the Securities Division its investigative costs of $6,000, and to pay a fine of $10,000. It was further agreed and ordered that the exemption claimed by bVisual Group under RCW 21.20.320(9), file number 80035003, was permanently revoked. Respondents bVisual, S.A.; bVisual Group; Larson; and Neal waived their rights to a hearing and to judicial review of this matter.
Brian Larson - S-09-382-10-CO02 – Consent Order
On November 17, the Securities Division entered into a Consent Order with Brian Larson (“Brian Larson”). The Securities Division had previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Revoke Exemptions, Impose Fines, and Recover Costs against Respondents bVisual, S.A.; bVisual Group, Ltd.; Stephan Anthony Larson; Kenneth Neal; Stephen Klos; and Brian Larson. bVisual, S.A. and bVisual Group, Ltd. are in the business of developing and marketing an “audio-video screen-sharing service” that allows multiple people to connect, see and hear each other through their computers. The Statement of Charges alleged that Brian Larson violated RCW 21.20.350 by making a false filing with the Securities Division. Without admitting or denying the allegations, Brian Larson agreed to cease and desist from violating the Securities Act of Washington. Brian Larson waived his right to hearing and to a judicial review of this matter.
Charles Jean Guzek - S-09-446-10-SC01 - Statement of Charges
On November 9, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Charge Costs (“Statement of Charges”) against Charles Jean Guzek (“Respondent”). The Statement of Charges alleges that Respondent solicited $10,000 from a Washington resident, which Respondent claimed he would invest in the foreign exchange market. The Statement of Charges further alleges that Respondent offered unregistered securities, acted as an unregistered securities salesperson, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order Respondent to cease and desist from violating the Securities Act of Washington, and gives notice of its intent to impose fines and charges costs. Respondent has a right to request a hearing on the Statement of Charges.
A Final Order was entered on January 12, 2011.
Meridian Partnership Management, Inc., MPM Investor Services, Inc., and CS Note Holdco, LLC - S-10-250-10-CO01 - Consent Order
On November 4, 2010, the Securities Division entered into a Consent Order with Meridian Partnership Management, Inc., MPM Investor Services, Inc., and CS Note Holdco, LLC (collectively, “Respondents”). The Securities Division previously entered a Statement of Charges on September 10, 2010 against Respondents and others, alleging multiple violations of the Securities Act of Washington in the Meridian Mortgage Investors Funds matter. Without admitting or denying the allegations, Respondents agreed to cease and desist from violating the Securities Act of Washington. CS Note Holdco further agreed to pay a fine of $25,000 once all investors of Meridian Mortgage Investors Fund V, LLC, Meridian Mortgage Investors Fund VI, LLC, Meridian Mortgage Investors Fund VII, LLC, Meridian Mortgage Investors Fund VIII, LLC, Meridian Mortgage Investors Fund IX, LLC, Meridian Mortgage Investors Fund X, LLC, Meridian Real Estate Opportunity Fund I, LLC, and CS Note Holdco, LLC have been repaid in full. Respondents waived their rights to a hearing and to judicial review of this matter.
Richard Cano, Bruce Trengove, Northrim Siding & Window LLC - S-06-214-10-FO01 - Final Order
On October 29, 2010, the Securities Division entered a Final Order against Richard Cano, Bruce Trengove, and Northrim Siding & Window LLC (collectively “Respondents”). The Securities Division previously entered a Statement of Charges in the same matter on September 8, 2010. The Statement of Charges alleged that Respondent Cano offered and sold at least $461,000 in investments, including investments in an advance fee scheme and investments in Northrim Siding & Window LLC, to at least 9 Washington residents; and that Respondent Trengove offered and sold $100,000 in investments in Northrim Siding & Window LLC to a Washington resident. The Statement of Charges further alleged that Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division orders Respondents to cease and desist from violating the Securities Act of Washington, orders Respondent Richard Cano to pay a fine of $10,000, and orders Respondents Richard Cano and Bruce Trengove to pay costs of $2,000. Respondents have a right to request judicial review of this matter.
Gary Brown and Dennis Shay - S-10-250-10-CO03 - Consent Order
On October 20, 2010, the Securities Division entered into a Consent Order with Gary Brown and Dennis Shay. The Securities Division previously entered a Statement of Charges on September 10, 2010 against Brown and Shay and others, alleging multiple violations of the Securities Act of Washington in the Meridian Mortgage Investors Funds matter. Without admitting or denying the allegations, Brown and Shay agreed to cease and desist from violating the Securities Act of Washington. Brown and Shay waived their rights to a hearing and to judicial review of this matter.
Darin Donaldson - S-09-163-10-CO03 - Consent Order
On October 19, 2010, the Securities Division entered into a Consent Order, S-09-163-10-CO03, with Darin Donaldson. Previously, on May 21, 2010, the Securities Division entered a Statement of Charges, S-09-163-10-SC01, against NDG Investment Group, LLC (NDG), Mr. Donaldson and others (collectively the Respondents). The Statement of Charges alleged that the Respondents sold investments in the form of partnership agreements, limited liability company interests and promissory notes for the purpose of constructing residential and commercial real estate developments in Lima, Peru. The Statement of Charges alleged that the Respondents raised over $15,000,000 from over 100 investors from 2006 to 2009. The Statement of Charges alleged that Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. In settling the matter, Mr. Donaldson, a former NDG employee, agreed, without admitting or denying the findings of fact, to cease and desist from violating the Securities Act of Washington. Mr. Donaldson waived his rights to a hearing or other further proceedings in the matter.
Gigapix Studios, Inc.; Christopher Blauvelt - S-09-018-10-SC01 - Statement of Charges
On October 14, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Charge Costs against Gigapix Studios, Inc. and Christopher Blauvelt (Collectively “Respondents”). The Statement of Charges alleges that Respondents offered and sold investment units in Gigapix, a digital studio formed to produce animated films and other productions. The Statement of Charges alleges that Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order Respondents to cease and desist from violating the Securities Act of Washington, and gives notice of its intent to impose fines and charge costs. Respondents have a right to request a hearing on the Statement of Charges.
A Final Order was entered regarding this matter on March 08, 2012.
Illuminized, Inc. and Lee Van Nguyen - S-10-044-10-FO01 - Final Order
On October 13, 2010, the Securities Division made an Entry of Findings of Fact and Conclusions of Law and Final Order to Cease and Desist and to Charge Costs (“Final Order”) against Respondents, Illuminized, Inc. and Lee Van Nguyen (“Nguyen”). The Securities Division found that Respondents did business in Seattle, Washington. The Securities Division found that Respondents had each offered and sold a $50,000 investment to a Washington investor without disclosing important information about the investment, including the risks of the investment and financial information about the purported guarantor and the issuer of the investment. The Securities Division found that Respondents had each violated RCW 21.20.010, the anti-fraud provision of the Securities Act of Washington. The Securities Division ordered Nguyen to pay investigative costs of $2,500. Respondents each have the right to request judicial review of the Final Order. The Securities Division had entered a Statement of Charges against Illuminized, Inc. and Lee Van Nguyen on June 18, 2010.
F. Darren Berg - S-10-250-10-FO01 - Final Order
On October 12, 2010, the Securities Division entered a Final Order against F. Darren Berg (Berg). The Securities Division had entered a Statement of Charges against Berg on September 10, 2010. The Statement of Charges alleged that, beginning as early as 2000, entities owned by Berg had offered and sold approximately $202,223,796 worth of investments to approximately seven hundred investors in approximately twenty seven states. The Statement of Charges further alleged that Berg violated the securities registration, broker-dealer or securities salesperson registration, and anti-fraud provisions of the Securities Act of Washington. The Final Order orders Berg to cease and desist from violating the Securities Act and to pay a $25,000 fine. Payment of this fine is deferred until all investors of Meridian Mortgage Investors Fund V, LLC, Meridian Mortgage Investors Fund VI, LLC, Meridian Mortgage Investors Fund VII, LLC, Meridian Mortgage Investors Fund VIII, LLC, Meridian Mortgage Investors Fund IX, LLC, Meridian Mortgage Investors Fund X, LLC, Meridian Real Estate Opportunity Fund I, LLC, and CS Note Holdco, LLC have been repaid in full. Berg has the right to request judicial review of the Final Order.
World Poker Tour Amateur Poker League, Inc.; A. J. Wiley; Shane McCullough; Kurt McPhail - S-10-233-10-CO01 - Consent Order
On September 29, 2010, the Securities Division entered into a Consent Order with World Poker Tour Amateur Poker League, Inc., A. J. Wiley, Shane McCullough, and Kurt McPhail (collectively, “Respondents”), in settlement of a prior Statement of Charges that was entered on June 15, 2010. World Poker Tour Amateur Poker League, Inc. is a Kansas-based business associated with Texas Hold’em poker tournaments. The Statement of Charges alleged that the Respondents offered licenses constituting franchises in Washington and failed to comply with the registration and disclosure document provisions of the Franchise Investment Protection Act. In settling the matter, the Respondents agreed, without admitting or denying the findings of fact, to cease offering or selling franchises in violation of those provisions. World Poker Tour Amateur Poker League, Inc. agreed to reimburse the Securities Division $500 for its costs of investigation. The Respondents also waived their right to a hearing and judicial review of the matter.
Linda C. Nicholls and A & E Productions - S-08-349-10-FO01 - Final Order
On September 29, 2010, the Securities Division entered a Final Order against Linda C. Nicholls and A & E Productions (“Respondents”). The Securities Division previously entered a Statement of Charges against the Respondents on May 4, 2010. The Statement of Charges alleged that in 2005, the Respondents raised at least $200,000 by offering and selling promissory notes to over a dozen investors in Washington and Idaho in connection with a purported investment program named the “Global Cash Card Program” involving foreign currency (forex) trading. The Securities Division alleged that the Respondents violated the registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division orders the Respondents to cease and desist from violating the Securities Act of Washington, and orders Nicholls to pay a fine of $10,000 and $5,000 in costs. The Respondents have a right to request judicial review of the Final Order
Nathan Hoerschelmann - S-09-163-10-CO01 - Consent Order
On September 29 , 2010, the Securities Division entered into a Consent Order, S-09-163-10-CO01, with Nathan Hoerschelmann. Previously, on May 21, 2010, the Securities Division entered a Statement of Charges, S-09-163-10-SC01, against NDG Investment Group, LLC (NDG), Mr. Hoerschelmann and others (collectively the Respondents). The Statement of Charges alleged that the Respondents sold investments in the form of partnership agreements, limited liability company interests and promissory notes for the purpose of constructing residential and commercial real estate developments in Lima, Peru. The Statement of Charges alleged that the Respondents raised over $15,000,000 from over 100 investors from 2006 to 2009. The Statement of Charges alleged that Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. In settling the matter, Mr. Hoerschelmann, a former NDG employee, agreed, without admitting or denying the findings of fact, to cease and desist from violating the Securities Act of Washington. Mr. Hoerschelmann waived his rights to a hearing or other further proceedings in the matter.
Jeffrey Beard; Harvest Wind Energy Corp.; Tapemorr, LLC - S-08-138-10-SC01 - Statement of Charges
On September 29, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Charge Costs against Jeffrey Beard; Harvest Wind Energy Corp.; and Tapemorr, LLC (collectively “Respondents”). The Statement of Charges alleges that Respondents offered and sold investments in the form of stock or promissory notes. The Statement of Charges alleges that Respondents offered unregistered securities, acted as unregistered broker-dealer or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order Respondents to cease and desist from violating the Securities Act of Washington, and gives notice of its intent to impose fines and charges costs. Respondents have a right to request a hearing on the Statement of Charges.
A Final Order was entered in this matter on November 17, 2010.
Chesterfield Mortgage Investors, Inc. and Charles M. Chesterfield - S-10-293-10-CO01 - Consent Order
On September 29, 2010, the Securities Division entered into a Consent Order with Chesterfield Mortgage Investors, Inc. (“CMI”) and Charles M. Chesterfield (“Chesterfield”). During an examination of CMI in August 2010, the Securities Division found that CMI had misused funds that were paid for the benefit of investors. The Securities Division found that CMI had misused more than $1 million in proceeds from early loan payoffs, instead of distributing the payoffs to the investors who had purchased participation interests in the loans. With the entry of the Consent Order, CMI’s securities broker-dealer license was revoked. Chesterfield’s securities salesperson license was also revoked for a period of at least ten years. Chesterfield also agreed to cooperate fully with the receiver who has been appointed to handle the liquidation of CMI.
Robert M. Firebaugh - S-09-039-10-FO03 - Final Order
On September 23, 2010, the Securities Division entered a Final Order against Robert M. Firebaugh (“Firebaugh”). The Securities Division previously entered a Statement of Charges against Firebaugh on November 24, 2009. The Statement of Charges alleged that between May 2007 and October 2008, approximately $2 million worth of Integrated Fuel Technologies, Inc. (“IFT”) common stock was sold to approximately 60 investors, the majority of whom were in Washington. The Securities Division alleged that Firebaugh offered and sold IFT stock and violated the registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division orders Firebaugh to cease and desist from violating the Securities Act of Washington, to pay a fine of $30,000, and investigative costs of $3,000. Firebaugh has a right to request judicial review of the Final Order.
Todd Allan Hoss - S-09-043-09-TO03 - Amended Summary Order
On September 21, 2010, the Securities Division entered an Amended Superseding Statement of Charges, Summary Order to Cease and Desist, Summary Order Revoking Exemptions, Summary Order Suspending and Notice of Intent to Revoke Securities Salesperson Registration, and Notice of Intent to Impose a Fine Against Hoss (“Amended Summary Order”). The Amended Summary Order alleged additional violations of the Washington Securities Act by Hoss. Based upon testimony and documents provided by Hoss, the Securities Division alleged that Hoss had failed to supervise securities salespersons, as required by RCW 21.20.110. The Securities Division alleged that Hoss had failed to establish and maintain adequate financial controls for his company, Hoss Mortgage Investors, Inc. The Securities Division also alleged that Hoss was the subject of an Arizona Securities Division Temporary Order to Cease and Desist that was filed on April 19, 2010. Hoss has made a timely request for an administrative hearing on the Amended Summary Order.
Blazing Onion Franchising, LLC - S-10-322-10-CO01 - Consent Order
On September 21, 2010, the Securities Division entered into a Consent Order with Blazing Onion Franchising, LLC, a Washington State limited liability company, in settlement of the Division’s allegations of a franchise law violation by the company. Blazing Onion Franchising, LLC is in the business of offering Blazing Onion Burger restaurant franchises. The Division alleged in the Consent Order that the company had failed to comply with the registration provision of the Franchise Investment Protection Act. Blazing Onion Franchising, LLC agreed, without admitting or denying the findings of fact, to cease offering or selling franchises in violation of the registration provision of the Franchise Act. Blazing Onion Franchising, LLC also waived its right to a hearing or other further proceedings in the matter.
Stephen Klos - S-09-382-10-FO01 - Final Order
On September 17, 2010, the Securities Division entered a Final Order against Stephen Klos. The Securities Division had previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Revoke Exemptions, Impose Fines, and Recover Costs (“Statement of Charges”) against Respondents, bVisual, S.A. (“bVisual, S.A.”); bVisual Group, Ltd. (“bVisual Group”); Stephan Anthony Larson (“Larson”); Kenneth Neal (“Neal”); Stephen Klos (“Klos”); and Brian Larson (“Brian Larson”) (collectively, “Respondents”). bVisual, S.A. and bVisual Group are in the business of developing and marketing an “audio-video screen-sharing service” that allows multiple people to connect, see and hear each other through their computers. The Statement of Charges alleged that Respondents, Larson, Neal and Klos, raised approximately $2,250,000 by offering and selling stock in bVisual, S.A. to approximately ninety-eight investors. The Statement of Charges also alleged that Respondents, Larson, Neal and Klos, raised approximately $950,000 by offering and selling stock in bVisual Group to approximately twenty-nine investors. The Statement of Charges further alleged that Respondents, bVisual, S.A.; bVisual Group; Larson; Neal; and Klos, violated the securities registration and anti-fraud provisions of the Securities Act of Washington, and that Respondents, bVisual Group and Brian Larson, violated RCW 21.20.350 by making a false filing with the Securities Division. The Securities Division orders Respondent Klos to cease and desist from violating the Securities Act of Washington, to pay a fine of $5,000, and investigative costs of $1,000. Respondent Klos has a right to request judicial review of this Final Order.
Craigstruck.com - S-10-311-10-CO01 - Consent Order
On September 15, 2010, the Securities Division entered into a Consent Order with Deuce Jackson, LLC d/b/a Craigstruck.com (Craigstruck.com) in settlement of the Division’s allegations of franchise law violations by the company. Craigstruck.com offered to sell unregistered franchises to Washington residents. The Division alleged in the Consent Order that Craigstruck.com failed to comply with the registration provisions of the Franchise Investment Protection Act. Craigstruck.com agreed, without admitting or denying the findings of fact, to cease offering or selling franchises in violation of the Act. Craigstruck.com also waived its right to a hearing or other further proceedings in the matter.
Dorothy of Oz, LLC; Neil Kaufman - S-09-356-10-CO01 - Consent Order
On September 14, 2010, the Securities Division entered into a Consent Order with Dorothy of Oz, LLC and Neil Kaufman. The Securities Division had previously entered a Statement of Charges, S-09-356-10-SC01, on May 11, 2010 against Dorothy of Oz, LLC, Kaufman and others. The Statement of Charges alleged that Dorothy of Oz, LLC through Kaufman and other salespersons offered and sold at least $736,390 worth of membership units in Dorothy of Oz, LLC to Washington residents. The Statement of Charges also alleged that Respondents violated the securities registration, securities salesperson registration, and anti-fraud provisions of the Securities Act of Washington. Without admitting or denying the allegations, Respondents agreed to cease and desist from violating the Washington Securities Act and to reimburse the Securities Division its investigative costs of $2,000. Dorothy of Oz, LLC further agreed to pay a fine of $10,000. Respondents waived their right to a hearing and to judicial review of this matter.
Halloween Express, LLC - S-10-212-10-CO01 - Consent Order
On September 14, 2010, the Securities Division entered into a Consent Order with Halloween Express, LLC, a Kentucky limited liability company based in Owenton, Kentucky, in settlement of the Division’s allegations of franchise law violations by the company. Halloween Express, LLC is in the business of selling costumes and franchising costume stores. The Division alleged in the Consent Order that the company had failed to comply with the registration and disclosure document provisions of the Franchise Investment Protection Act. Halloween Express, LLC agreed, without admitting or denying the findings of fact, to cease offering or selling franchises in violation of those provisions. Halloween Express, LLC agreed to reimburse the Securities Division $1,500 for its costs of investigation. Halloween Express, LLC also waived its right to a hearing or other further proceedings in the matter.
SVC Investments, Inc. d/b/a Orange Tree Frozen Yogurt - S-10-232-10-CO01 - Consent Order
On September 14, 2010, the Securities Division entered into a Consent Order with SVC Investments, Inc. d/b/a Orange Tree Frozen Yogurt, a California corporation, in settlement of the Division’s allegations of franchise law violations by the company. SVC Investments, Inc. d/b/a Orange Tree Frozen Yogurt is in the business of manufacturing and marketing frozen yogurt products. The Division alleged in the Consent Order that the company had failed to comply with the registration and disclosure document provisions of the Franchise Investment Protection Act. SVC Investments, Inc. d/b/a Orange Tree Frozen Yogurt agreed, without admitting or denying the findings of fact, to cease offering or selling franchises in violation of those provisions. SVC Investments, Inc. d/b/a Orange Tree Frozen Yogurt agreed to reimburse the Securities Division $4,000 for its costs of investigation. SVC Investments, Inc. d/b/a Orange Tree Frozen Yogurt also waived its right to a hearing or other further proceedings in the matter.
Iron Horse Petroleum; Cherokee Gas Systems, Inc. - S-10-075-10-FO01 - Final Order
On September 10, 2010 the Securities Division entered a Final Order against Iron Horse Petroleum, Inc. (Iron Horse) and Cherokee Gas Systems, Inc. (Cherokee). The Securities Division had previously issued a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Impose Fines, and to Charge Costs in this matter on July 29, 2010. The Statement of Charges alleged that Iron Horse and Cherokee offered and sold oil and gas interests located in Cotton County, Oklahoma worth at least $336,250 to at least twelve Washington residents, most of whom are elderly. The Statement of Charges further alleged that Respondents violated the registration of securities and anti-fraud provisions of the Washington Securities Act. The Final Order orders Iron Horse and Cherokee to cease and desist from violating the Securities Act of Washington, and orders Iron Horse and Cherokee to each pay a fine of $10,000 and to pay investigative costs of $2,000. Payment of these fines and costs shall not be due until Iron Horse’s and Cherokee’s investors have been repaid in full. The Respondents have a right to request judicial review of the Final Order.
Associated Capital Advance - S-10-258-10-SC01 - Statement of Charges
On September 10, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist against Associated Capital Advance (ACA) LLC and Sandy Hoffman (collectively “Respondents”). Respondents are sellers of a business opportunity that involves the solicitation of loan applications from merchants seeking credit card advances. The Statement of Charges alleges that Respondents offered and sold this business opportunity to at least one Washington resident while not registered under the Business Opportunity Fraud Act of Washington. The Statement of Charges alleges that Respondents failed to provide material information and disclosure documents regarding the business opportunity. The Statement of Charges alleges that Respondents made misstatements of material fact(s) and/or omitted material fact(s) and/or engaged in act(s) and practice(s) that operated as fraud or deceit. The Securities Division intends to order Respondents to cease and desist from violating provisions of the Business Opportunity Fraud Act. Respondents have a right to request a hearing on the Statement of Charges.
A Final Order was entered in this matter on February 18, 2011.
Meridian Mortgage Investors Fund V, LLC, Meridian Mortgage Investors Fund VI, LLC, Meridian Mortgage Investors Fund VII, LLC, Meridian Mortgage Investors Fund VIII, LLC, Meridian Mortgage Investors Fund IX, LLC, Meridian Mortgage Investors Fund X, LLC, Meridian Real Estate Opportunity Fund I, LLC, Meridian Partnership Management, Inc.; MPM Investor Services, Inc.; CS Note Holdco, LLC, F. Darren Berg, Gary Brown, Dennis Shay - S-10-250-10-SC01 - Statement of Charges
On September 10, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Recover Costs and to Impose Fines against Meridian Mortgage Investors Fund V, LLC, Meridian Mortgage Investors Fund VI, LLC, Meridian Mortgage Investors Fund VII, LLC, Meridian Mortgage Investors Fund VIII, LLC, Meridian Mortgage Investors Fund IX, LLC, Meridian Mortgage Investors Fund X, LLC, Meridian Real Estate Opportunity Fund I, LLC, Meridian Partnership Management, Inc., MPM Investor Services, Inc., CS Note Holdco, LLC, F. Darren Berg (Berg), Gary Brown, Dennis Shay (collectively, Respondents). The statement of charges alleges that, since as early as 2000, the Respondent entities and two additional entities owned by Berg but not named as Respondents in the Statement of Charges offered and sold approximately $202,223,796 worth of investments to approximately seven hundred investors in approximately twenty seven states. The substantial majority of these investors are Washington residents. The Statement of Charges further alleges that Respondents violated the securities registration, broker-dealer or securities salesperson registration, and anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order the Respondents to cease and desist from violating the Securities Act of Washington and gives notice of its intent to impose fines and recover costs. The Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order was entered on December 3, 2010 as to Meridian Mortgage Investors Fund V, LLC, Meridian Mortgage Investors Fund VI, LLC, Meridian Mortgage Investors Fund VII, LLC, Meridian Mortgage Investors Fund VIII, LLC, Meridian Mortgage Investors Fund IX, LLC, Meridian Mortgage Investors Fund X, LLC, and Meridian Real Estate Opportunity Fund I, LLC
A Consent Order as to Meridian Partnership Management, Inc., MPM Investor Services, Inc., and CS Note Holdco, LLC, was entered on November 4, 2010.
A Consent Order as to Gary Brown and Dennis Shay was entered on October 20, 2010.
A Final Order as to F. Darren Berg was entered on October 12, 2010.
James H. Liddell - S-09-112-09-CO01 - Consent Order
On September 9, 2010, the Securities Division entered a Consent Order, S-09-112-09-CO01 with James H. Liddell. The Securities Division had previously entered a Statement of Charges and Notice of Enter Order to Cease and Desist; and to Impose Fines against Liddell and Leslie Collins on October 5, 2009. The Statement of Charges alleged that beginning in 2005 Liddell and Collins, via Payright Merchant Services-Seattle, raised over $3,750,000 through the sale of promissory notes and loan agreements to as least seven Washington residents and at least one Oregon resident in violation of the Washington State Securities Act. Liddell neither admitted nor denied the allegations, but agreed to cease and desist from violating the registration and anti-fraud provisions of the Securities Act. Additionally, Liddell and will not make application for, nor be granted, a broker-dealer, securities sales person, investment adviser and/or investment adviser representative license in Washington. Liddell waived his right to hearing and to a judicial review of this matter.
Leslie Collins - S-09-112-09-CO02 - Consent Order
On September 9, 2010, the Securities Division entered a Consent Order, S-09-112-09-CO02 with Leslie Collins. The Securities Division had previously entered a Statement of Charges and Notice of Enter Order to Cease and Desist; and to Impose Fines against James H. Liddell and Collins on October 5, 2009. The Statement of Charges alleged that beginning in 2005 Liddell and Collins, via Payright Merchant Services-Seattle, raised over $3,750,000 through the sale of promissory notes and loan agreements to as least seven Washington residents and at least one Oregon resident in violation of the Washington State Securities Act. Collins neither admitted nor denied the allegations, but agreed to cease and desist from violating the registration and anti-fraud provisions of the Securities Act. Collins waived her right to hearing and to a judicial review of this matter.
Richard Cano, Bruce Trengove, Northrim Siding & Window LLC - S-06-214-10-SC01 - Statement of Charges
On September 8, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Impose Fines, and Recover Costs (“Statement of Charges”) against Richard Cano, Bruce Trengove, and Northrim Siding & Window LLC (collectively “Respondents”). The Statement of Charges alleges that Respondent Cano offered and sold at least $461,000 in investments, including investments in an advance fee scheme and investments in Northrim Siding & Window LLC, to at least 9 Washington residents; and that Respondent Trengove offered and sold $100,000 in investments in Northrim Siding & Window LLC to a Washington resident. The Statement of Charges alleges that Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order Respondents to cease and desist from violating the Securities Act of Washington, and gave notice of its intent to collect fines and recover costs. Respondents have a right to request a hearing on the Statement of Charges.
A Final Order was entered in this matter on October 29, 2010.
Gold Exchange, LLC - S-10-078-10-CO01 - Consent Order
On September 8 2010, the Securities Division entered into a Consent Order with Gold Exchange, LLC, a Colorado limited liability company, in settlement of the Division’s allegations of franchise law violations by the company. Gold Exchange, LLC is in the business of purchasing precious metals and offering opportunities to operate Gold Exchange businesses that purchase precious metals from the public.The Division alleged in the Consent Order that the company had failed to comply with the registration and disclosure document provisions of the Franchise Investment Protection Act. Gold Exchange, LLC agreed, without admitting or denying the findings of fact, to cease offering or selling franchises in violation of those provisions. Gold Exchange, LLC agreed to reimburse the Securities Division $825 for its costs of investigation. Gold Exchange, LLC also waived its right to a hearing or other further proceedings in the matter.
David Kilpatrick - S-09-280-10-CO01 - Consent Order
On September 1, 2010, the Securities Division entered into a Consent Order with David Kilpatrick (“Kilpatrick”). The Securities Division had previously issued a Statement of Charges against Iris Data Communications Corporation (“Iris Data”) and Kilpatrick on December 23, 2009. The Statement of Charges alleged that Iris Data and Kilpatrick each offered unregistered securities and violated the anti-fraud provisions of the Securities Act of Washington and that Kilpatrick violated the securities broker-dealer and salesperson provision. In settling the matter, Kilpatrick neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act of Washington. Kilpatrick waived his right to a hearing and to judicial review of this matter.
Universal Online, Inc.; J. William Oldenburg; Nancy L. Whitney; Gregory J. Caputo - S-08-037-10-SC01 - Statement of Charges
On August 30, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Issue an Order to Cease and Desist, Impose Fines, and Charge Costs against Universal Online, Inc.; J. William Oldenburg; Nancy L. Whitney; and Gregory J. Caputo (collectively “Respondents”). The Statement of Charges alleges that Respondent Oldenburg offered an investment, in the form of a promissory note, to at least two Washington residents. Respondent Oldenburg raised at least $154,150, purportedly for the development and marketing of the “OPC business system,” a system designed to facilitate the financing of large scale commercial real estate. The Statement of Charges alleges that Respondents Oldenburg, Whitney, and Caputo made misrepresentations and/or omissions to at least one resident regarding the investment. The Statement of Charges further alleges that certain Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provision of the Securities Act of Washington. The Securities Division ordered Respondents to cease and desist from violating the Securities Act of Washington, and gave notice of its intent to impose fines and charge costs. Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order was issued on March 29, 2011 as to Nancy L. Whitney and Gregory J. Caputo.
Credit Suisse Securities (USA) LLC - S-09-379-09-CO01 - Consent Order
On August 30, 2010, the Securities Division entered into a Consent Order with Credit Suisse Securities (USA) LLC (“Respondent”), in order to settle the allegations that the Respondent engaged in dishonest and unethical practices in the sale of auction rate securities (“ARS”), and failed to reasonably supervise its salespersons in the marketing and sale of ARS. The Respondent neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act of Washington. The Respondent agreed to offer to purchase at par ARS that since February 14, 2008 have not been auctioning from individual investors who purchased those ARS from the Respondent prior to February 14, 2008. The Respondent agreed to pay $80,707.01 as a civil monetary penalty. The Respondent waived its right to a hearing and to judicial review of this matter.
Tradeology.com, Inc.; Traderight Corp. dba Traderight Securities, Inc.; Jygnesh Rohit Patel - S-08-211-09-SC01 - Statement of Charges
On August 26, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Issue an Order to Cease and Desist, Impose Fines, and Recover Costs against Tradeology.com, Inc.; Traderight Corp. dba Traderight Securities, Inc. (“Traderight Securities”); and Jygnesh Rohit Patel (collectively “Respondents”). The Statement of Charges alleges that approximately ten Washington residents were sold stock in Tradeology.com, Inc., a start-up online stock trading company located in Florida. Subsequently, Respondent Patel told the residents that he arranged for their stock in Tradeology.com, Inc. to be exchanged for stock in Traderight Securities, a company he had acquired. It is believed that this exchange never occurred. After Tradeology.com, Inc. went out of business, Respondent Patel presented two additional stock offerings to at least two of the residents as a means to recoup losses incurred from their investment in the company. The Statement of Charges further alleges that certain Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provision of the Securities Act of Washington. The Securities Division ordered Respondents to cease and desist from violating the Securities Act of Washington, and gave notice of its intent to impose fines and recover costs. Respondents have a right to request a hearing on the Statement of Charges.
A Final Order was entered in this matter on December 14, 2010.
A Consent Order was entered as to Traderight Corp. DBA Traderight Securities, Inc. on January 11, 2011.
Charles McSwain, Billie’s Casino Investment LLC - S-06-150-10-CO01 - Consent Order
On August 18, 2010, the Securities Division entered into a Consent Order with Charles McSwain and Billie’s Casino Investment LLC (collectively “Respondents”). In the Consent Order, the Securities Division alleged that the Respondents offered and sold at least $1,378,688 in investments in Billie’s Casino Investment LLC to at least 15 Washington residents. The Respondents raised the funds in order to open and operate a mini-casino in Renton, Washington. The Securities Division alleged that Respondents offered and sold unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. In settling the matter, Respondents neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act. Respondent McSwain further agreed to pay a fine of $5,000. Respondents waived their rights to a hearing and to judicial review of this matter.
Suhrco Real Estate Advisors Inc. - S-10-213-10-SC01 - Statement of Charges
On August 9 , 2010, the Securities Division entered Order No. S -10-213-10-SC01 , Statement of Charges and Notice of Intent to Suspend Investment Adviser Registration and Impose Fines against Suhrco Real Estate Advisors, Inc. ("Suhrco"). The Statement of Charges alleges that Suhrco violated the Securities Act of Washington by, among other charges, failing to make required annual filings of its Form ADV Part 1 and fiscal year end balance sheet with the Securities Division. The Statement of Charges gives notice that the Securities Division intends to enter an order suspending Suhrco's investment adviser registration and imposing fines until Suhrco complies with WAC 460-24A-060 and WAC 460-24A-205. Suhrco has the right to request a hearing on the Statement of Charges.
Lundgren & Associates LLC - S-10-215-10-SC01 - Statement of Charges
On August 5, 2010, the Securities Division entered Order No. S-10-215-10-SC01, Statement of Charges and Notice of Intent to Suspend Investment Adviser Registration and Impose Fines against Lundgren & Associates LLC ("Lundgren"). The Statement of Charges alleges that Lundgren violated the Securities Act of Washington by failing to make required annual filings of its Form ADV Part 1 and balance sheet with the Securities Division. The Statement of Charges gives notice that the Securities Division intends to enter an order suspending Lundgren's investment adviser registration and imposing fines until Lundgren complies with WAC 460-24A-060 and WAC 460-24A-205. Lundgren has the right to request a hearing on the Statement of Charges.
Financial Advocates Advisory Services LLC - S-10-214-10-SC01 - Statement of Charges
On August 5, 2010, the Securities Division entered Order No. S-10-214-10-SC01, Statement of Charges and Notice of Intent to Suspend Investment Adviser Registration and Impose Fines against Financial Advocates Advisory Services LLC ("Financial Advocates"). The Statement of Charges alleges that Financial Advocates violated the Securities Act of Washington by failing to make the annual required filing of its 2009 fiscal year end balance sheet. The Statement of Charges gives notice that the Securities Division intends to enter an order suspending Financial Advocate's investment adviser registration and imposing fines until Financial Advocates complies with WAC 460-24A-060. Financial Advocates has the right to request a hearing on the Statement of Charges.
On August 17, 2010, Financial Advocates Advisory filed the balance sheet required by WAC 460-24A-060 and this matter was closed.
First Line Finance, LLC; Carl Cravens, Thomas Rudland - S-06-204-10-CO01 - Consent Order
On August 5, 2010, the Securities Division entered into a Consent Order with First Line Finance, LLC (First Line) and Thomas Rudland, in settlement of the Division’s allegations of securities law violations by the company. First Line offered and sold promissory notes secured by deeds of trust to Washington residents. The Division alleged in the Consent Order that the company and its principal Thomas Rudland had failed to comply with the registration and anti-fraud provisions of the Securities Act. First Line’s managing member Carl Cravens and Thomas Rudland agreed, without admitting or denying the findings of fact, to cease offering or selling securities in violation of those provisions. First Line agreed to reimburse the Securities Division $1,000 for its costs of investigation. First Line Finance, LLC also waived its right to a hearing or other further proceedings in the matter.
Shawn E. Stoller, FA Monitors, Inc. - S-09-193-09-CO01 - Consent Order
On August 4, 2010, the Securities Division entered into a Consent Order with Shawn E. Stoller and FA Monitors, Inc. The Securities Division previously had entered a Summary Order Suspending Investment Adviser and Investment Adviser Representative Registration and Notice of Intent to Revoke Registration and Order to Cease and Desist against Shawn E. Stoller and FA Monitors, Inc. (“Summary Order”) on July 2, 2009. Shawn E. Stoller (“Stoller”) was an investment adviser representative and president of investment adviser FA Monitors, Inc. In the Summary Order, the Securities Division alleged that Stoller engaged in dishonest or unethical practices when he obtained $800,000 from his elderly clients for the purposes of making a three-year business investment on their behalf, and instead of making the investment, converted $650,000 of the funds for his personal use. In settling the matter, Stoller neither admitted nor denied the allegations in the Summary Order, but agreed to cease and desist from violating the anti-fraud provision of the Securities Act. Stoller further agreed to surrender his investment adviser representative registration and the investment adviser registration of FA Monitors, Inc., and agreed that he would not apply for registration as an investment adviser or investment adviser representative for a period of ten years from July 2, 2009. Stoller and FA Monitors, Inc. waived their rights to a hearing and to judicial review of this matter.
S & B Energy, LLC and Robert J. Braun - S-10-077-10-FO01 - Final Order
On July 30, 2010, the Securities Division entered an Entry of Findings of Fact and Conclusions of Law and Final Order to Cease and Desist and to Charge Costs (“Final Order”) against Respondents, S & B Energy, LLC and Robert J. Braun. The Final Order found that Respondents had their principal place of business in Spokane, Washington and that S & B Energy, LLC was formed to build and to operate ethanol plants, but no plants were ever built. The Final Order found that Respondents offered and sold more than $500,000 worth of S & B Energy investments to more than ten Washington investors. The Final Order ordered Respondents to cease and desist from violating the securities registration section, the securities broker-dealer and securities salesperson registration section, and the anti-fraud section of the Securities Act of Washington. The Final Order also ordered Robert J. Braun to pay investigative costs of $5,000. Respondents each have the right to petition the superior court for judicial review. The Securities Division had previously entered a Statement of Charges on June 18, 2010 against the Respondents.
Iron Horse Petroleum, Inc; Cherokee Gas Systems, Inc; Thomas Labry - S-10-075-10-SC01 - Statement of Charges
On July 29, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Impose Fines, and to Charge Costs against Thomas Labry, and two entities Labry controls, Iron Horse Petroleum, Inc. and Cherokee Gas Systems, Inc. The Statement of Charges alleges that Iron Horse and Cherokee offered and sold oil and gas interests located in Cotton County, Oklahoma worth at least $336,250 to at least twelve Washington residents, most of whom are elderly. The Statement of Charges further alleges that Respondents violated the registration of securities, registration of securities salespersons and anti-fraud provisions of the Washington Securities Act. The Securities Division intends to order the Respondents to cease and desist from violation of the Securities Act of Washington and gives notice of its intent to impose fines and recover costs. The Respondents have a right to request a hearing on the Statement of Charges.
As of 9-29-10 Thomas Labry has not been served with this Statement of Charges.
Olympic Coast Investment, Inc. - S-10-025-10-CO01 - Consent Order
On July 23, 2010, the Securities Division and Respondent, Olympic Coast Investment, Inc., entered into a Consent Order. Respondent neither admitted nor denied the Findings of Fact and Conclusions of Law set forth in the Consent Order. Respondent is a registered mortgage paper securities broker-dealer that has its principal place of business in Seattle, Washington. The Securities Division alleged that when offering and selling $3,000,000 worth of promissory note and deed of trust investments to more than seventy investors, Respondent represented to investors that a $400,000 development holdback would be used to assure the completion of the infrastructure for the real property that secured the investment. The Securities Division alleged that Respondent failed to disclose to investors that the property developer needed to install a sewer lift station and that the lift station had never been completed. The Securities Division alleged that Respondent failed to promptly disclose to investors that Respondent was making interest payments to investors from the $400,000 development holdback. The Securities Division alleged that Respondent failed to promptly disclose to investors that the borrower had defaulted on the underlying loan. The Securities Division alleged that Respondent violated registration provisions and violated the anti-fraud provision of the Securities Act of Washington by misrepresenting or failing to disclose material facts when offering and selling the investment. Respondent agreed to pay a fine of $10,000 and to pay investigative costs of $3,000. Respondent waived its right to a hearing and to judicial review of the matter.
Benjamin Rankin; Chad Barron; Pioneer Property Group, LLC; Queen’s Court Building, LLC - S-09-396-10-CO01 – Consent Order
On July 21, 2010, the Securities Division entered into a Consent Order with Benjamin Rankin, Chad Barron, Pioneer Property Group, LLC, and Queen’s Court Building, LLC. The Securities Division had previously entered a Statement of Charges, S-09-396-10-SC01, on June 1, 2010 against the Respondents. The Statement of Charges alleged that Pioneer Property Group, through its principals Barron and Rankin, offered and sold at least $1.38 million worth of membership units in Queen’s Court Building, LLC, an entity ultimately managed by Barron and Rankin, and organized to acquire and hold title to the Queen’s Court building in Seattle which Pioneer Property Group intended to convert into condominium units. The Statement of Charges also alleged that Respondents sold at least $2.105 million worth of promissory notes. The Statement of Charges further alleged that Respondents violated the securities registration, broker-dealer and securities salesperson registration, and anti-fraud provisions of the Securities Act of Washington. Without admitting or denying the allegations, Respondents agreed to cease and desist from violating the Washington Securities Act and to reimburse the Securities Division its investigative costs of $5,000. Barron and Rankin each further agreed to pay a fine of $2,000. Respondents waived their right to a hearing and to judicial review of this matter.
Rhonda Lee Breard - S-10-048-10-CO01 - Consent Order
On July 20, 2010, the Securities Division entered into a Consent Order, S-10-048-10-CO01, with Rhonda Lee Breard (“Breard”). The Securities Division had previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Deny Future Registrations, Impose Fines, and Recover Costs against Breard on April 6, 2010. The Securities Division alleged that Breard, formerly a securities salesperson and investment adviser representative doing business out of Kirkland, Washington, engaged in a scheme to defraud many of her brokerage customers. The Securities Division alleged that from at least July 2003 to February 2010, Breard converted at least $9 million dollars from approximately 39 of her customers, for her personal use. The Securities Division further alleged that Breard engaged in dishonest and unethical practices in the securities business and violated the anti-fraud provision of the Securities Act of Washington. Breard neither admitted nor denied the allegations. It was agreed and ordered that Breard shall cease and desist from violating the anti-fraud provision of the Securities Act of Washington, and that she will be permanently barred from being licensed as a securities professional in the State of Washington. It was further agreed that Breard shall not offer or sell securities, or be engaged in the business of effecting transactions in securities, in the State of Washington. Breard waived her right to a hearing and to judicial review of this matter.
Patrick Reagan; John C. Shriner; The World Bikini Sports League, LLC (now known as The World Women’s Sports Association) - S-09-464-10-SC01 - Statement of Charges
On July 20, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Recover Costs (“Statement of Charges”) against Patrick Reagan (“Reagan”); John C. Shriner (“Shriner”); and The World Bikini Sports League, LLC (“TWBSL”) (now known as The World Women’s Sports Association). TWBSL was a football league featuring women playing football in bikinis. The Statement of Charges alleges that Respondents offered and sold investments, in the form of membership units in TWBSL, to approximately fifteen Washington investors, raising approximately $228,500. The Statement of Charges further alleges that Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order the Respondents to cease and desist from violating the Securities Act of Washington, and gave notice of its intent to impose a fine and charge costs. The Respondents have the right to request a hearing on the Statement of Charges.
A Consent Order was entered regarding this matter on October 13, 2011.
bVisual, S.A.; bVisual Group, Ltd.; Stephan Anthony Larson; Kenneth Neal; Stephen Klos; Brian Larson - S-09-382-10-SC01 - Statement of Charges
On July 8, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Revoke Exemptions, Impose Fines, and Recover Costs (“Statement of Charges”) against Respondents, bVisual, S.A. (“bVisual, S.A.”); bVisual Group, Ltd. (“bVisual Group”); Stephan Anthony Larson (“Larson”); Kenneth Neal (“Neal”); Stephen Klos (“Klos”); and Brian Larson (“Brian Larson”) (collectively, “Respondents”). bVisual, S.A. and bVisual Group are in the business of developing and marketing an “audio-video screen-sharing service” that allows multiple people to connect, see and hear each other through their computers. The Statement of Charges alleges that Respondents, Larson, Neal and Klos, raised approximately $2,250,000 by offering and selling stock in bVisual, S.A. to approximately ninety-eight investors. The Statement of Charges also alleges that Respondents, Larson, Neal and Klos, raised approximately $950,000 by offering and selling stock in bVisual Group to approximately twenty-nine investors. The Statement of Charges further alleges that Respondents, bVisual, S.A.; bVisual Group; Larson; Neal; and Klos, violated the securities registration and anti-fraud provisions of the Securities Act of Washington, and that Respondents, bVisual Group and Brian Larson, violated RCW 21.20.350 by making a false filing with the Securities Division. The Securities Division intends to order the Respondents to cease and desist from violating the Securities Act of Washington, and gave notice of its intent to impose fines, recover costs and revoke the exemption claimed by bVisual Group, file number 80035003. The Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order as to bVisual, S.A., bVisual Group, Ltd, Stephan Anthony Larson and Kenneth Neal was entered on November 17, 2010.
A Consent Order as to Brian Larson was entered on November 17, 2010.
A Final Order as to Stephen Klos was entered on September 17, 2010.
Randy Lacey; Walter Price; Shawn Syre - S-09-356-10-FO01 – Final Order
On July 7, 2010, the Securities Division entered a Final Order against Randy Lacey, Walter Price, and Shawn Syre. The Securities Division had previously entered a Statement of Charges against Lacey, Price, and Syre on May 11, 2010. The Securities Division alleged that between October of 2006 and March of 2010, Dorothy of Oz, LLC offered and sold at least $736,390 worth of interests in Dorothy of Oz to at least thirty one Washington residents. The Securities Division further alleged that Respondents Lacey, Price, and Syre offered and sold interests in Dorothy of Oz and violated the securities salesperson registration and anti-fraud provisions of the Washington Securities Act. The Final Order orders Respondents Lacey, Price, and Syre to cease and desist from violating the Securities Act. Respondents Lacey, Price, and Syre have the right to request judicial review of the Final Order.
Mike Watson Investments, LLC; Mike Watson Capital, LLC; Michael Watson; Joshua Escobedo - S-09-426-10-FO01 - Final Order
On July 7, 2010, the Securities Division entered a Final Order against Mike Watson Investments, LLC; Mike Watson Capital, LLC; Michael Watson; and Joshua Escobedo (collectively, “Respondents”). The Securities Division previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Charge Costs (“Statement of Charges”) against Respondents on May 10, 2010. The Statement of Charges alleged that Respondents offered and sold promissory notes issued by Mike Watson Capital, LLC to at least eight Washington investors, totaling at least $1,000,000 as part of an offering that raised $25 million from investors nationwide. The Statement of Charges further alleged violations of the Securities Act of Washington. Those violations included that Respondents offered unregistered securities, that Respondent Mike Watson Investments, LLC acted as an unregistered broker-dealer and that Respondents Michael Watson and Joshua Escobedo acted as unregistered securities salespersons, and that Respondents made misleading statements in connection with the sale of the securities. The Securities Division orders Respondents to cease and desist from violating the Securities Act of Washington and pay investigative costs in the amount of $2,000. The Securities Division further orders Respondents Mike Watson Investments, LLC; Mike Watson Capital, LLC; and Michael Watson to pay a fine of $30,000, and orders Respondent Joshua Escobedo to pay a fine of $10,000. Respondents have a right to request judicial review of the Final Order.
John W. Tedmon and Michelle M. Bolland - S-09-078-10-SC01 - Statement of Charges
On July 7, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, to Impose a Fine, and to Charge Costs (“Statement of Charges”) against Respondents, John W. Tedmon (“Tedmon”) and Michelle M. Bolland (“Bolland”). The Statement of Charges alleges that Tedmon and Bolland did business in Yelm, Washington. The Statement of Charges alleges that from 2006 through 2009, Tedmon offered and sold more than $680,000 worth of promissory note and deed of trust investments to at least six Washington investors. The investments were secured by deeds of trust issued by Tedmon. The Statement of Charges alleges that during 2009 and 2010, Tedmon offered and sold $185,000 worth of promissory note and deed of trust investments to at least four Washington investors and that the notes and deeds of trust were issued by Bolland. The Statement of Charges alleges that Respondents each violated the anti-fraud provision of the Securities Act of Washington. The Statement of Charges alleges that Tedmon violated the securities registration provision of the Securities Act of Washington. The Statement of Charges also alleges that Tedmon violated a 1982 Consent Order. The Statement of Charges gives notice of the Securities Division’s intent to impose a fine and to charge costs. Respondents each have the right to request a hearing on the Statement of Charges.
A Consent Order regarding this matter was entered on January 30, 2012.
Wildflower, LLC and Raymond J. Goad - S-08-167-10-CO01 - Consent Order
On July 1, 2010, the Securities Division entered into a Consent Order with Respondents, Wildflower, LLC and Raymond J. Goad (“Goad”). Respondents neither admitted nor denied the Findings of Fact and Conclusions of Law. The Securities Division alleged that during 2002 Respondents offered and sold a limited liability company membership interest investment for more than $90,000 in Wildflower, LLC to a Washington investor. The Securities Division alleged that Respondents each represented to the Washington investor that Wildflower, LLC was going to develop and own a luxury resort property in Texas. The Securities Division alleged that Respondents each misrepresented the safety of the investment and they each failed to disclose significant risks of the investment, including a risk of undercapitalization and the failure to disclose Goad’s prior failed real estate development ventures. Respondents, Wildflower, LLC and Goad, each agreed to cease and desist from any violation of the anti-fraud section of the Securities Act of Washington. Respondents each waived their right to a hearing and to judicial review of the matter.
A Statement of Charges was issued in this matter on April 19, 2010.
B3 Studios, LLC d/b/a barre3 - S-10-122-10-CO01 - Consent Order
On July 1, 2010, the Securities Division entered into a Consent Order with B3 Studios, LLC d/b/a barre3, an Oregon limited liability company, in settlement of the Division’s allegations of franchise law violations by the company. B3 Studios, LLC is in the business of operating and selling franchises for barre3 fitness studios. The Division alleged in the Consent Order that the company had failed to comply with the registration and disclosure document provisions of the Franchise Investment Protection Act. B3 Studios, LLC agreed, without admitting or denying the findings of fact, to cease offering or selling franchises in violation of those provisions. B3 Studios, LLC agreed to reimburse the Securities Division $700 for its costs of investigation. B3 Studios, LLC also waived its right to a hearing or other further proceedings in the matter.
The Securities Division had previously entered a Statement of Charges on May 27, 2010.
Suspended in Time, Inc. - S-09-394-10-CO01 - Consent Order
On June 28, 2010, the Securities Division entered into a Consent Order with Suspended in Time, Inc., a Utah corporation, in settlement of the Division’s allegations of franchise law violations by the company. Suspended in Time is in the business of selling flower preservation and floral arrangement services. The Division alleged in the Consent Order that the company had failed to comply with the registration and disclosure document provisions of the Franchise Investment Protection Act. Suspended in Time, Inc. agreed, without admitting or denying the findings of fact, to cease offering or selling franchises in violation of those provisions. Suspended in Time, Inc. agreed to reimburse the Securities Division $625 for its costs of investigation. Suspended in Time, Inc. also waived its right to a hearing or other further proceedings in the matter.
Northwest Property Associates, Inc.; Grant Holdings, L.L.C.; and Shirley J. Henderson - S-09-026-09-SC01 - AMENDED Statement of Charges (Order Dismissed)
On June 24, 2010 the Securities Division entered an AMENDED Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist and to Impose a Fine against Respondents, Northwest Property Associates, Inc.; Grant Holdings, L.L.C.; and Shirley J. Henderson. Respondents held themselves out as being in the business of buying and selling real estate for profit. The Securities Division alleged that Respondents, doing business in Bellevue, Washington, each offered and sold promissory note and deed of trust investments. The Securities Division alleged that Respondents offered and sold unregistered securities and that Shirley J. Henderson acted as an unregistered securities broker-dealer or securities salesperson. The Securities Division alleged that Respondents each violated the anti-fraud provisions of the Securities Act of Washington by misrepresenting or by failing to disclose material information about the securities that were offered and sold. The Securities Division alleged that Respondents each failed to disclose the risks of the investments, the source of repayment for the investments, the payment history of prior investments, and financial information about the issuers of the investments. The Securities Division also gave notice of its intent to impose a $10,000 fine against Shirley J. Henderson. Respondents each have the right to request a hearing on the Statement of Charges.
Notes:
A Final Order was entered regarding this matter on January 4, 2012
This amended order supersedes the Statement of Charges issued on December 1, 2009.
On October 25, 2011, Administrative Law Judge Thomas P. Rack entered an order granting Respondents’ motion for directed verdict and dismissing the Amended Statement of Charges.
S & B Energy, LLC and Robert J. Braun - S-10-077-10-SC01 - Statement of Charges
On June 18, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist and to Charge Costs (“Statement of Charges”) against Respondents, S & B Energy, LLC (“ S & B Energy”) and Robert J. Braun. The Statement of Charges alleges that S & B Energy, which had its principal place of business in Spokane, was formed to build and to operate ethanol plants, but no plants were ever built. The Statement of Charges alleges that from at least 2006 through 2008, Respondents offered and sold more than $500,000 worth of S & B Energy investments to more than ten Washington investors. The Statement of Charges alleges that Respondents offered and sold unregistered securities and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order Respondents to cease and desist from violating the Securities Act of Washington and to charge costs. Respondents each have the right to request a hearing on the Statement of Charges.
A Final Order was entered in this matter on July 30, 2010.
AutoUpLinkUSA Franchises, Inc - S-09-402-10-CO01 - Consent Order
On June 18, 2010, the Securities Division entered into a Consent Order with Auto UplinkUSA Franchises, Inc. Auto UplinkUSA Franchises, Inc. is in the business of providing automobile dealers with software applications, products and services. The Securities Division has alleged that Auto UplinkUSA Franchises, Inc. sold a franchise to a Washington resident while not registered under the Franchise Investment Protection Act of Washington (the Act). In settling the matter, Auto UplinkUSA Franchises, Inc. neither admitted nor denied the allegation, but agreed to cease and desist from violating the Act. The company further agreed to pay investigative costs of $500 and waived its right to a hearing and judicial review of the matter.
Illuminized, Inc. and Lee Nguyen - S-10-044-10-SC01 - Statement of Charges
On June 18, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist and to Charge Costs (“Statement of Charges”) against Respondents, Illuminized, Inc. and Lee Nguyen. The Statement of Charges alleges that Respondents offered and sold at least one investment for $50,000 to a Washington investor. The Statement of Charges alleges that Respondents each failed to disclose significant information about the investment, including the risks of the investment and the intended use of the investor’s funds. The Statement of Charges gives notice of the Securities Division’s intent to enter an order to cease and desist against Respondents and to charge costs of $2,500 against Lee Nguyen. Respondents each have the right to request a hearing on the Statement of Charges.
A Final Order was issued in this matter on October 13, 2010
World Poker Tour Amateur Poker League, Inc.; A. J. Wiley; Shane McCullough; Kurt McPhail - S-10-233-10-SC01 - Statement of Charges
On June 15, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist against World Poker Tour Amateur Poker League, Inc., A. J. Wiley, Shane McCullough, and Kurt McPhail. The Statement of Charges alleges that World Poker Tour Amateur Poker League, Inc., through its employees Wiley, McCullough, and McPhail, offered and sold franchises in the State of Washington that had not been registered with the Security Administrator. The Statement of Charges also alleges that the Respondents failed to provide the Washington purchasers with the required Franchise Disclosure Documents containing all material information about the franchises that were offered and sold. The Securities Division intends to order the Respondents to cease and desist from violating the State of Washington’s Franchise Investment Protection Act. Each of the Respondents has the right to request a hearing on the Statement of Charges.
A Consent Order was entered in this matter on September 29, 2010.
Mill Creek Development, LLC; John Tomasello; John D’Arcy - S-09-403-10-CO01 - Consent Order
On June 11, 2010, the Securities Division entered into a Consent Order with Mill Creek Development, LLC and its principals, John Tomasello and John D’Arcy. The Securities Division previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines and Charge Costs against Mill Creek Development, Tomasello, and D’Arcy on February 2, 2010. The Statement of Charges alleged that Respondents violated the securities registration, securities salesperson registration, and anti-fraud provisions of the Washington Securities Act (Act). In settling the matter, Respondents neither admitted nor denied the allegations, but agreed to cease and desist from violating the Act. Respondents further agreed to pay investigative costs of $2,000. Respondents waived their right to a hearing and to judicial review of the matter.
Eric A. Moore d/b/a Generational Prosperity - S-07-477-10-CO01 - Consent Order
On June 7, 2010, the Securities Division entered into a Consent Order with Eric A. Moore (“Moore”), who did business in the name of Generational Prosperity in Tacoma, Washington. The Securities Division had previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Impose Fines, and Recover Costs, on May 4, 2010. The Statement of Charges alleged that between approximately 2002 and 2007, Moore raised approximately $700,000 by offering and selling securities in the form of promissory notes and notes payable to more than fifteen investors in Washington and other states. Moore pooled investor funds in an online brokerage account, and then used investor funds to engage in risky day trading, causing several investors to lose most of their investment. The Statement of Charges alleged that Moore violated the registration and anti-fraud provisions of the Securities Act of Washington. In settling the matter, Moore neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act. Moore agreed to pay investigative costs of $2,500 and a fine of $1,000. Moore waived his right to a hearing and judicial review of the matter.
UBS Securities LLC and UBS Financial Services Inc. - S-08-228-10-CO01 - Consent Order
On May 27, 2010, the Securities Division entered into a Consent Order with UBS Securities LLC and UBS Financial Services Inc. (collectively “Respondents”), in order to settle the allegations that Respondents engaged in dishonest and unethical practices in the sale of auction rate securities (“ARS”), and failed to reasonably supervise its salespersons in the marketing and sale of ARS. Respondents neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act of Washington. Respondents agreed to offer to purchase at par from certain current and former customers ARS that failed at least once in auctions between August 8, 2008 and October 7, 2008. Respondents agreed to pay $1,805,294.31 as a civil monetary penalty. Respondents each waived their right to a hearing and to judicial review of this matter.
B3 Studios, LLC d/b/a barre3 - S-10-122-10-SC01 - Statement of Charges
On May 27, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Order Number S-10-122-10-SC01 (the “Statement of Charges”) against B3 Studios, LLC d/b/a barre3, a seller of a fitness studio franchise opportunity. The Statement of Charges alleges that B3 Studios, LLC d/b/a barre3 offered and/or sold licenses to operate barre3 studios in Vancouver and Bellevue, Washington and failed to comply with the registration and delivery of offering circular provisions of the Franchise Investment Protection Act. B3 Studios, LLC d/b/a barre3 has the right to request a hearing on the Statement of Charges.
A Consent Order was entered on July 1, 2010.
NDG Investment Group, LLC; Jose Nino De Guzman; Philip Boos; Darin Donaldson; Glenn Fulton; Nathan Hoerschelmann; Lucy M. Miller; Maxime Albi; Ejercito Residential, LLC; Arequipa, LLC; 28th of July, LLC; Miraflores-Francia, LLC; Larco-Bolivar Investments, LLC; Madrid Residential, LLC; Residencial Casuarinas, LLC; El Golf Residential, LLC; Del Solar Residential, LLC; Shell La Paz, LLC; NDG-Brycon, LLC;NDG-Brycon 2, LLC; Los Alamos Residential, LLC; Grau Residential, LLC; and Jorge Chavez, LLC; - S-09-163-09-SC01 - Statement of Charges
On May 21, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Impose Fines, and Recover Costs against NDG Investment Group, LLC; Jose Nino De Guzman; Philip Boos; Darin Donaldson; Glenn Fulton; Nathan Hoerschelmann; Lucy M. Miller; Maxime Albi; Ejercito Residential, LLC; Arequipa, LLC; 28th of July, LLC; Miraflores-Francia, LLC; Larco-Bolivar Investments, LLC; Madrid Residential, LLC; Residencial Casuarinas, LLC; El Golf Residential, LLC; Del Solar Residential, LLC; Shell La Paz, LLC; NDG-Brycon; NDG-Brycon 2, LLC; Los Alamos Residential, LLC; Grau Residential, LLC; and Jorge Chavez, LLC (Collectively Respondents). The Statement of Charges alleges that the Respondents sold investments in the form of partnership agreements, limited liability company interests and promissory notes for the purpose of constructing residential and commercial real estate developments in Lima, Peru. The Statement of Charges alleges that the Respondents raised over $15,000,000 from over 100 investors from 2006 to 2009.The Statement of Charges alleges that Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order Respondents to cease and desist from violating the Securities Act of Washington and gives notice of its intent to impose fines and charge costs. Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order as to Maxime Albi was entered on September 11, 2013.
A Consent Order as to Lucy M. Miller was entered on March 28, 2012.
A Consent Order as to Glenn Fulton was entered on April 29, 2011.
A Consent Order as to Philip Boos was entered on January 3, 2011.
A Consent Order as to Darin Donaldson was entered on October 19, 2010
A Consent Order as to Nathan Hoerschelmann was entered on September 29, 2010.
Seismic Shock Control, Inc. and Edward Coumou - S-08-028-09-FO02 - Final Order
On May 21, 2010, the Securities Division entered a Final Order against Seismic Shock Control, Inc. (“Seismic Shock”), and its President, Ed Coumou (“Coumou”) (collectively, “Respondents”). The Securities Division had previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Impose Fines, and Recover Costs, on March 16, 2010. The Securities Division alleged that the Respondents raised almost $3,000,000 by offering and selling stock in Seismic Shock to nearly 300 investors. Seismic Shock formerly used an office in Arlington, Washington and was in the business of developing and manufacturing bearings that were to be used to protect buildings, bridges, and other structures from damage due to seismic events. The Securities Division alleged that Seismic Shock and Coumou violated the registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division orders the Respondents to cease and desist from violating the Securities Act of Washington, and orders Coumou to pay a fine of $5,000 and to pay investigative costs of $2,500. The Respondents have a right to request judicial review of the Final Order.
Dorothy of Oz, LLC; Alpine Pictures, Inc.; Neil Kaufman; Michael Bergh; Randy Lacey; Michael Luther; Walter Price; Shawn Syre - S-09-356-10-SC01 - Statement of Charges
On May 11, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Charge Costs, and to Impose Fines against Dorothy of Oz, LLC d/b/a Box Office Productions III, its managing member Neil Kaufman, Alpine Pictures, Inc., and salespersons of Dorothy of Oz, LLC and Alpine Pictures, Inc. The Statement of Charges alleges that Dorothy of Oz, LLC sold at least $736,390 worth of limited liability company interests in Dorothy of Oz, LLC to at least thirty one Washington residents. The Statement of Charges also alleges that Respondents violated the registration of securities, registration of securities salespersons, and anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order the Respondents to cease and desist from violating the Securities Act of Washington and gives notice of its intent to impose fines and recover costs. The Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order as to Dorothy of Oz, LLC and Neil Kaufman was entered on September 14, 2010.
A Final Order was issued as to Randy Lacey, Walter Price and Shawn Syre on July 7, 2010.
Mike Watson Investments, LLC; Mike Watson Capital, LLC; Michael Watson; Joshua Escobedo - S-09-426-10-SC01 - Statement of Charges
On May 10, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Charge Costs (“Statement of Charges”) against Respondents, Mike Watson Investments, LLC; Mike Watson Capital, LLC; Michael Watson; and Joshua Escobedo. The Statement of Charges alleges that Respondents offered and sold promissory notes issued by Mike Watson Capital, LLC to at least eight Washington investors, totaling at least $1,000,000 as part of an offering that raised $25 million from investors nationwide. The Statement of Charges further alleges violations of the Securities Act of Washington. Those violations include that Respondents offered unregistered securities, that Respondent Mike Watson Investments, LLC acted as an unregistered broker-dealers and that Respondents Michael Watson and Joshua Escobedo acted as unregistered securities salespersons, and that Respondents made misleading statements in connection with the sale of the securities. The Securities Division intends to order the Respondents to cease and desist from violating the Securities Act of Washington, and gave notice of its intent to impose a fine and charge costs. The Respondents have the right to request a hearing on the Statement of Charges.
A Final Order was entered in this matter on July 7, 2010.
Spencer Brown, dba Rent-A-Green Box – S-09-156-10-CO01 – Consent Order
On May 10, 2010, the Securities Division entered into a Consent Order with Spencer Brown, doing business as (dba) Rent-A-Green Box. Rent-A-Green Box is in the business of renting moving or storage boxes made from recycled materials. It offered to license this concept to individuals who were to purchase the boxes for the purpose of renting them to the general public. The Securities Division previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist against Spencer Brown dba Rent-A-Green Box on November 20, 2009. The Statement of Charges alleged that Rent-A-Green Box offered a franchise to a Washington resident while not registered under the Franchise Investment Protection Act of Washington (the Act). In settling the matter, Spencer Brown dba Rent-A-Green Box neither admitted nor denied the allegations, but agreed to cease and desist from violating the Act. He further agreed to pay investigative costs of $625 and waived his right to a hearing and judicial review of the matter.
Russillo’s, LLC and Brandon Scott Russell - S-10-022-10-SC01 - Statement of Charges
On May 5, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist and to Charge Costs (“Statement of Charges”) against Respondents, Russillo’s, LLC and Brandon Scott Russell (“Russell”). Russillo’s was an Italian restaurant that had two locations in Yakima, Washington. The Statement of Charges alleged that during 2006 and 2007, Respondents each offered and sold more than $150,000 worth of limited liability company membership interests in Russillo’s, LLC to approximately twenty Washington investors. The Statement of Charges alleged that Respondents each violated the securities registration provision because the offering of securities was not registered and that Russell violated the securities broker-dealer and salesperson registration provision because Russell was not a registered securities broker-dealer or securities salesperson. The Statement of Charges also alleged that Respondents each violated the securities anti-fraud provisions because Respondents each misrepresented or failed to disclose material information about the investments. The Statement of Charges also gives notice of intent to charge costs of $2,500 to Russell. Respondents each have the right to request a hearing on the Statement of Charges.
Linda C. Nicholls and A & E Productions - S-08-349-09-SC01 - Statement of Charges
On May 4, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Impose Fines, and Recover Costs against Linda C. Nicholls and A & E Productions (“Respondents”). The Statement of Charges alleges that in 2005, the Respondents raised at least $200,000 by offering and selling promissory notes to over a dozen investors in Washington and Idaho in connection with a purported investment program named the “Global Cash Card Program” involving foreign currency (forex) trading. The Statement of Charges alleges that the Respondents violated the registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order the Respondents to cease and desist from violating the Securities Act of Washington, and gives notice of its intent to impose a fine and recover costs. The Respondents have a right to request a hearing on the Statement of Charges.
A Final Order was issued in this matter on September 29, 2010.
Valerie D’Andrea - S-09-022-10-FO01 - Final Order
On May 4, 2010, the Securities Division entered a Final Order against Valerie D’Andrea (“Respondent”). The Securities Division previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Charge Costs (“Statement of Charges”) against Respondent on March 24, 2010. The Statement of Charges alleged that Respondent offered investments in the form of promissory notes and raised over $500,000 from investors. The Statement of Charges alleged that Respondent offered unregistered securities, acted as an unregistered securities salesperson, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division orders Respondent Valerie D’Andrea to cease and desist from violating the Securities Act of Washington, to pay a fine of $30,000, and investigative costs of $15,000. Payment of the fine and costs is to be deferred until the D’Andrea promissory note investors have been repaid in full. Respondent has a right to request judicial review of the Final Order.
Eric A. Moore d/b/a Generational Prosperity - S-07-477-10-SC02 - Statement of Charges
On May 4, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Impose Fines, and Recover Costs against Eric A. Moore (“Moore”), who did business in the name of Generational Prosperity in Tacoma, Washington. The Statement of Charges alleges that between approximately 2002 and 2007, Moore raised approximately $700,000 by offering and selling securities in the form of promissory notes and notes payable to more than fifteen investors in Washington and other states. Moore pooled investor funds in an online brokerage account, and then used investor funds to engage in risky day trading, causing several investors to lose most of their investment. The Statement of Charges alleges that Moore violated the registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order Moore to cease and desist from violating the Securities Act of Washington, and gives notice of its intent to impose a fine and recover costs. Moore has a right to request a hearing on the Statement of Charges.
A Consent Order was entered on June 7, 2010.
Joel Barth; Northwest Capital Advisors, Ltd. - S-09-367-10-FO01 - Final Order
On April 30, 2010, the Securities Division entered a Final Order against Northwest Capital Advisors, Ltd. and its principal, Joel Barth. The Securities Division had previously issued a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist and to Charge Costs against Northwest Capital Advisors and Barth on March 24, 2010. The Statement of Charges alleged that Barth, acting on behalf of Northwest Capital Advisors, offered stock to at least two Washington residents and made offers of stock through two websites accessible to the general public in violation of the Washington Securities Act’s registration provisions. The Statement of Charges also alleges that the Respondents violated the anti-fraud provisions of the Securities Act. The Securities Division orders the Respondents to cease and desist from violating the Securities Act of Washington and to pay investigative costs of $2,000. Respondents have a right to judicial review of the Final Order.
Education Comics LLC and Diane Russomanno - S-08-102-10-FO01 - Final Order
On April 28, 2010, the Securities Division entered a Final Order to Cease and Desist and to Charge Costs (“Final Order”) against Respondents, Education Comics LLC and Diane Russomanno. Education Comics is located in Agoura Hills, California. The Final Order found that Education Comics and Russomanno each offered and sold more than $500,000 worth of investments in Education Comics to more than twenty Washington investors. The investments were to be used to develop and market a series of educational comic books called “The Adventures of Scooter McDoogal.” The Final Order found that the investments were securities that were not registered and that Russomanno was not registered as a securities salesperson or securities broker-dealer. The Final Order found that when offering and selling the securities, Respondents each failed to disclose material information, including financial information about the company and the risks of the investments. The Final Order charged costs of $5,000 to Diane Russomanno. Respondents each have the right to petition the superior court for judicial review. The Securities Division had previously issued a Statement of Charges on January 28, 2010.
Goldman, Sachs & Co. - S-10-086-10-CO01 - Consent Order
On April 28, 2010, the Securities Division entered into a Consent Order with Goldman, Sachs & Co. (“Respondent”), in order to settle the allegations that Respondents engaged in unethical practices in the sale of auction rate securities (“ARS”), and failed to reasonably supervise its agents in the marketing and sale of ARS. Respondent neither admitted nor denied the allegations. Respondent agreed to buy back at par ARS purchased from Respondent on or before February 11, 2008 that have not been auctioning. Respondent agreed to pay a civil monetary penalty of $285,652.04. Respondent waived its right to a hearing and to judicial review of this matter.
AIG Promotions, LLC - S-09-450-10-CO01 - Consent Order
On April 26, 2010, the Securities Division entered into a Consent Order with AIG Promotions, LLC (“AIG Promotions”). The Securities Division previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist against AIG Promotions, LLC and Davidan Corporation, d/b/a Bankcard Empire (collectively “Respondents”) on February 2, 2010. Respondents are sellers of a business opportunity that involves the leasing of merchant credit card processing machines. The Statement of Charges alleged that Respondents offered and sold this business opportunity to at least one Washington resident while not registered under the Business Opportunity Fraud Act of Washington, RCW 19.110. The Statement of Charges further alleged that Respondents failed to provide material information and disclosure documents regarding the business opportunity. In settling the matter, AIG Promotions neither admitted nor denied the allegations, but agreed to cease and desist from violating the Business Opportunity Fraud Act. AIG Promotions agreed to pay investigative costs of $900. AIG Promotions waived its right to a hearing and judicial review of the matter.
Stifel, Nicolaus & Company, Inc. - S-10-040-10-CO01 - Consent Order
On April 26, 2010, the Securities Division entered into a Consent Order with Stifel, Nicolaus & Company, Inc. (“Stifel”) to settle allegations that Stifel failed to reasonably supervise its salespersons in connection with the offer and sale of auction rate securities (“ARS”). In settling the matter, Stifel neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act of Washington. Stifel further agreed to buy back ARS at par from certain customers and pay a fine of $1,512.29. Stifel waived its right to a hearing and to judicial review of this matter.
Davidan Corporation, d/b/a Bankcard Empire - S-09-450-10-FO01 – Final Order
On April 23, 2010, the Securities Division entered a Final Order against Davidan Corporation, d/b/a Bankcard Empire (“Bankcard Empire”). The Securities Division previously entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist against AIG Promotions, LLC and Bankcard Empire on February 2, 2010. Respondents are sellers of a business opportunity that involves the leasing of merchant credit card processing machines. The Statement of Charges alleged that Respondents offered and sold this business opportunity to at least one Washington resident while not registered under the Business Opportunity Fraud Act of Washington, RCW 19.110. The Statement of Charges further alleged that Respondents failed to provide material information and disclosure documents regarding the business opportunity. The Securities Division orders Respondent Bankcard Empire to cease and desist from violating the registration, disclosure document and anti-fraud provisions of the Business Opportunity Fraud Act of Washington. Respondent Bankcard Empire has a right to request judicial review of the Final Order.
Wells Fargo Securities, LLC (as successor to Wells Fargo Brokerage Services, LLC) and Wells Fargo Institutional Securities, LLC - S-08-141-09-CO02 - Consent Order
On April 22, 2010, the Securities Division entered into a Consent Order with Wells Fargo Securities, LLC (“WFS”), successor to Wells Fargo Brokerage Services, LLC (“WFBS”), and Wells Fargo Institutional Securities, LLC (“WFIS”). The Securities Division had previously entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Offer Restitution, Impose Fines, Recover Costs, and Suspend Registrations (“Statement of Charges”) against Wells Fargo Investments, LLC (“WFI”); Wells Fargo Brokerage Services, LLC; and Wells Fargo Institutional Securities, LLC (Collectively “Respondents”) on November 20, 2008. The Statement of Charges alleged that Respondents engaged in dishonest or unethical business practices in the sale of auction rate securities (“ARS”) and failed to supervise reasonably its registered agents in connection with the marketing of ARS to their customers. WFS (as successor to WFBS) and WFIS neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act of Washington. WFS (as successor to WFBS) and WFIS voluntarily agreed to offer to purchase ARS at par that were purchased for customers by WFBS or WFIS on or before February 13, 2008 and have failed at auction at least once since that time. WFS (as successor to WFBS) and WFIS agreed to be jointly and severally liable along with WFI for the payment of $219,116 representing the fees and expenses incurred by the Securities Division in connection with the investigation. WFS (as successor to WFBS) and WFIS waived their right to a hearing and to judicial review of this matter.
Wells Fargo Investments, LLC - S-08-141-10-CO01 - Consent Order
On April 22, 2010, the Securities Division entered into a Consent Order with Wells Fargo Investments, LLC (“WFI”). The Securities Division had previously entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Offer Restitution, Impose Fines, Recover Costs, and Suspend Registrations (“Statement of Charges”) against Wells Fargo Investments, LLC; Wells Fargo Brokerage Services, LLC (“WFBS”); and Wells Fargo Institutional Securities, LLC (“WFIS”) on November 20, 2008. The Statement of Charges alleged that WFI, WFBS and WFIS engaged in dishonest or unethical business practices in the sale of auction rate securities (“ARS”) and failed to supervise reasonably its registered agents in connection with the marketing of ARS to their customers. WFI neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act of Washington. WFI agreed to offer to purchase at par ARS that were purchased for customers by WFI on or before February 13, 2008 and have failed at auction at least once since that time. WFI agreed to pay $104,982.36 as a civil monetary fine. WFI, Wells Fargo Securities, LLC (as successor to WFBS), and WFIS agreed to be jointly and severally liable for the payment of $219,116 representing the fees and expenses incurred by the Securities Division in connection with the investigation. WFI waived its right to a hearing and to judicial review of this matter.
Michael Axon - S-08-028-10-FO01 - Final Order
On April 21, 2010, the Securities Division entered a Final Order against Michael Axon (“Axon”), the former President and CEO of Seismic Shock Control, Inc. The Securities Division had previously entered a Statement of Charges against Axon on March 16, 2010. The Statement of Charges alleged that Axon violated the registration and anti-fraud provisions of the Securities Act of Washington and raised almost $3,000,000 by offering and selling stock in Seismic Shock to nearly 300 investors in Washington and other states. Seismic Shock formerly used an office in Arlington, Washington and was in the business of developing and manufacturing bearings that were to be used to protect buildings, bridges, and other structures from damage due to seismic events. The Securities Division orders Axon to pay a fine of $5,000, and to pay investigative costs of $2,500. Axon has a right to request judicial review of the Final Order.
Wildflower, LLC and Raymond J. Goad - S-08-167-10-SC01 - Statement of Charges
On April 19, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist and to Impose a Fine (“Statement of Charges”) against Respondents, Wildflower, LLC and Raymond J. Goad (“Goad”). From at least 2002 until 2006, Wildflower, LLC had its principal place of business in Dallas, Texas. Goad was the managing member of the LLC and was formerly a licensed attorney in Washington. The Securities Division alleged that during 2002 Respondents offered and sold a limited liability company membership interest investment for more than $90,000 in Wildflower, LLC to a Washington investor. The Securities Division alleged that Respondents each represented to the Washington investor that Wildflower was going to develop and own a luxury resort property in Texas. The Securities Division alleged that Respondents each misrepresented the safety of the investment and they each failed to disclose significant risks of the investment, including a risk of undercapitalization and the failure to disclose Goad’s prior failed real estate development ventures. The Securities Division is seeking a fine of $10,000 from Goad. Respondents each have the right to request a hearing on the Statement of Charges.
A Consent Order was issued in this matter on July 1, 2010.
Seniors Helping Seniors, LLC - S-09-395-10-CO01 - Consent Order
On April 9, 2010, the Securities Division entered into a Consent Order with Seniors Helping Seniors, LLC. The company’s businesses offer personal services such as in home elderly care, home assistance, companion care, transportation, homemaking and maintenance and repair assistance to senior citizens. Seniors Helping Seniors, LLC agreed, among other things, to comply with the registration provision of the Franchise Investment Protection Act, agreed to disclose the Consent Order to current Washington franchisees, as well as to reimburse the Securities Division $600 for its costs of investigation. Seniors Helping Seniors, LLC also waived its rights to a hearing and judicial review of the matter.
Rhonda Lee Breard - S-10-048-10-SC01 - Statement of Charges
On April 6, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Deny Future Registrations, Impose Fines, and Recover Costs against Rhonda Lee Breard (“Respondent”). The Securities Division alleges that the Respondent, formerly a securities salesperson and investment advisor representative doing business out of Kirkland, Washington, engaged in a scheme to defraud many of her brokerage customers. The Securities Division alleges that from at least July 2003 to February 2010, the Respondent converted at least $9 million dollars from approximately 39 of her customers, for her personal use. The Securities Division further alleges that the Respondent engaged in dishonest and unethical practices in the securities business and violated the anti-fraud provision of the Securities Act of Washington. The Securities Division intends to order that the Respondent cease and desist from violating the anti-fraud provision of the Securities Act of Washington, and gave notice of its intent to deny future securities registration applications of the Respondent. The Securities Division also gave notice of its intent to impose a fine and recover costs. The Respondent has a right to request a hearing on the Statement of Charges.
A Consent Order was entered on July 20, 2010.
Garage Floor Coating Franchise System, Inc. and Robert Hanson - S-09-208-10-CO01 - Consent Order
On April 6, 2010, the Securities Division entered into a Consent Order with Garage Floor Coating Franchise System, Inc. and Robert Hanson. Garage Floor Coating Franchise System, Inc. is the seller of an opportunity involving concrete coating utilizing, in part, a polyurethane coating to beautify and to protect concrete against weathering, cracking, oil and chemicals. The Consent Order was in settlement of a previous Corrected Statement of Charges, Order Number S-09-208-09-SC01 (the “Statement of Charges”) entered on February 19, 2010 against Garage Floor Coating Franchise System, Inc. and Robert Hanson. The Statement of Charges alleged that Garage Floor Coating Franchise System, Inc. and Robert Hanson failed to comply with the registration requirement provision of the Franchise Investment Protection Act. Garage Floor Coating Franchise System, Inc. and Robert Hanson agreed, among other things, to comply with the registration provision of the Franchise Investment Protection Act, agreed to disclose the Consent Order to current Washington franchisees, as well as to reimburse the Securities Division $625 for its costs of investigation. Garage Floor Coating Franchise System, Inc. and Robert Hanson also waived their rights to a hearing or other further proceedings in the matter.
Valerie D’Andrea - S-09-022-10-SC01 - Statement of Charges
On March 24, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Charge Costs against Valerie D’Andrea (“Respondent”). Respondent offered investments in the form of promissory notes which Respondent claimed would be used to fund her trades in the futures markets. The Statement of Charges alleges the Respondent raised over $500,000 from investors. The Statement of Charges alleges that Respondent offered unregistered securities, acted as an unregistered securities salesperson, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order Respondents to cease and desist from violating the Securities Act of Washington, and gives notice of its intent to impose fines and charges costs. Respondent has a right to request a hearing on the Statement of Charges.
A Final Order was entered on May 4, 2010.
TSG Real Estate, LLC and Wayne Robert (“Rob”) Hannah III - S-08-376-10-CO01 - Consent Order
On March 24, 2010, the Securities Division entered into a Consent Order with Respondents, TSG Real Estate, LLC (“TSG Real Estate”) and Wayne Robert Hannah III (“Hannah”). TSG Real Estate’s principal place of business was located in Chicago, Illinois. Hannah managed and directed and was the President and Chief Executive Officer of TSG Real Estate. The Securities Division alleged that Respondents each represented to investors that TSG Capital was raising money to purchase or to refinance real properties that would be owned by its affiliated companies. The Securities Division alleged that during 2006 and 2007, Respondents offered and sold more than $13,000,000 worth of securities, including more than $2,500,000 worth of membership interests to more than twenty Washington investors. The Securities Division alleged that Respondents each misrepresented or failed to disclose the intended use of investor funds and other material information when offering and selling the securities. The Securities Division alleged that Respondents each failed to disclose that more than $3,200,000 of investor funds would be used for security deposits that became nonrefundable and were forfeited without acquiring any real property. Without admitting or denying the allegations, Respondents, TSG Real Estate and Hannah, each agreed to cease and desist from any violation of the anti-fraud section of the Securities Act of Washington. TSG Real Estate and Hannah each waived their right to a hearing and to judicial review of the matter.
Joel Barth; Northwest Capital Advisors, Ltd - S-09-367-10-SC01 - Statement of Charges
On March 24, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist and to Charge Costs against Northwest Capital Advisors, Ltd. and its principal Joel R. Barth. The Statement of Charges alleges that Barth, acting on behalf of Northwest Capital Advisors offered stock to at least two Washington residents and made offers of stock through two websites accessible to the general public in violation of the Washington Securities Act’s registration provisions. The Statement of Charges also alleges that the Respondents violated the anti-fraud provisions of the Securities Act. The Securities Division intends to order the Respondents to cease and desist from violating the Securities Act and to charge the Respondents for the costs of investigation. The Respondents have a right to request a hearing on the Statement of Charges.
A Final Order was issued in this matter on April 30, 2010.
Culinary Communion, LLC, Gabriel Claycamp, and Heidi Kenyon - S-06-216-10-FO01 - Final Order
On March 22, 2010, the Securities Division entered a Final Order against Culinary Communion, LLC, Gabriel Claycamp, and Heidi Kenyon ("Respondents"), who operated a school for the culinary arts in Seattle, Washington. The Securities Division previously entered a Statement of Charges against the Respondents on December 7, 2009. The Statement of Charges alleged that, between 2005 and 2008, the Respondents raised approximately $150,000 by offering and selling convertible promissory notes and other investments to Washington investors. The Respondents were previously subject to a Summary Order to Cease and Desist in 2004, and later entered into a Consent Order in which they agreed to cease violating the Securities Act of Washington. The Statement of Charges alleges that following the Consent Order, the Respondents again violated the registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division orders the Respondents to cease and desist from violating the Securities Act of Washington, to pay a fine of $10,000, and to pay investigative costs of $1,000. The Respondents have a right to request judicial review of the Final Order.
Energy Automation Systems, Inc.; Joseph Merlo; Paul Bleiweis - S-07-480-09-CO01 - Consent Order
On March 17, 2010, the Securities Division entered into a Consent Order with Respondents Energy Automation Systems, Inc.; Joseph Merlo; and Paul Bleiweis (collectively “Respondents”). The Securities Division had previously entered a Statement of Charges, S-07-480-08-SC01, on January 5, 2009, against the Respondents. Respondents operate a business that sells energy saving systems and products to office buildings and other businesses. The Statement of Charges alleged that Respondents offered and sold business opportunities to distribute Energy Automation Systems, Inc. products to various Washington Residents while not registered under the Business Opportunity Fraud Act of Washington, RCW 19.110. The Statement of Charges further alleged that Respondents failed to provide disclosure documents regarding the business opportunity and caused to be filed with the director a document which contained inaccurate or misleading information. Without admitting or denying the allegations, Respondents agreed to cease and desist from violating the provisions of RCW 19.110. Respondents waived their right to a hearing and to judicial review of this matter and agreed to pay costs of $5,000.
Sant Ambrozic LLC; Jason Scott Sant, now known as Jim Brick; Tyler Thomas Ambrozic - S-07-574-10-FO02 - Final Order
On March 16, 2010, the Securities Division entered an Entry of Findings of Fact and Conclusions of Law as to Sant Ambrozic LLC and Tyler Thomas Ambrozic and Final Order to Cease and Desist and to Charge Costs (“Final Order”). The Securities Division had previously entered a Statement of Charges against Respondents, Sant Ambrozic LLC and Tyler Thomas Ambrozic, on December 18, 2009. The Statement of Charges alleged that Respondents held themselves out as real estate developers and offered and sold at least $275,000 worth of promissory note and deed of trust investments to at least three Washington investors. The Final Order ordered Sant Ambrozic LLC and Tyler Thomas Ambrozic to cease and desist from violating the securities registration section, the securities broker-dealer and securities salesperson registration section, and the anti-fraud section of the Securities Act of Washington. The Securities Division also ordered Tyler Thomas Ambrozic to pay investigative costs of $3,000. Respondents, Sant Ambrozic LLC and Tyler Thomas Ambrozic, each have the right to petition the superior court for judicial review.
Seismic Shock Control, Inc., Michael Axon, and Edward Coumou - S-08-028-09-SC01 - Statement of Charges
On March 16, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Impose Fines, and Recover Costs against Seismic Shock Control, Inc., and its former CEO Michael Axon, and its President, Ed Coumou (collectively “Respondents”). The Statement of Charges alleges that between approximately 2001 and 2006, the Respondents raised almost $3,000,000 by offering and selling stock in Seismic Shock to nearly 300 investors. Seismic Shock formerly used an office in Arlington, Washington and was in the business of developing and manufacturing bearings that were to be used to protect buildings, bridges, and other structures from damage due to seismic events. The Statement of Charges alleges that the Respondents violated the registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order the Respondents to cease and desist from violating the Securities Act of Washington, and gives notice of its intent to impose fines and recover costs. The Respondents have a right to request a hearing on the Statement of Charges.
A Final Order was entered as to Michael Axon on April 21, 2010
A Final Order as to Edward Coumou was entered on May 21, 2010.
William S. Bennett, Jr. - S-10-032-10-FO01 - Final Order
On March 16, 2010, the Securities Division entered a Final Order against William S. Bennett, Jr. (“Bennett”). The Securities Division had previously issued a Statement of Charges and Notice of Intent to Deny Future Securities Salesperson Registration against Bennett on February 8, 2010. On December 15, 2009, Bennett pled guilty to one felony count of theft of federal government funds in United States District Court, Western District of Washington. The Final Order denies any future securities salesperson registration that Bennett might file with the Securities Division. Bennett has a right to judicial review of the Final Order.
Banc of America Securities LLC; Merrill Lynch, Pierce, Fenner & Smith Incorporated - S-08-226-09-CO01 - Consent Order
On March 12, 2010, the Securities Division entered into a Consent Order with Banc of America Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated (as successor by merger of Banc of America Investment Services, Inc.) (collectively “Respondents”), in order to settle the allegations that Respondents engaged in dishonest and unethical practices in the sale of auction rate securities (“ARS”), and failed to reasonably supervise its salespersons in the marketing and sale of ARS. Respondents neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act of Washington. Respondents agreed to offer to purchase at par ARS that were purchased from Respondents on or before to February 13, 2008, that were subject to an auction failure on or after February 11, 2008. Respondents agreed to pay $1,424,671.43 as a civil monetary penalty. Respondents each waived their right to a hearing and to judicial review of this matter.
Da-Vi Nails International, LLC - S-09-072-09-CO01 - Consent Order
On March 9, 2010, the Securities Division entered into a Consent Order with Da-Vi Nails International, LLC (Consent Order No. S-09-072-09-CO01) in settlement of the Division’s allegations of franchise law violations by the company. Da-Vi Nails International, LLC is the seller of an opportunity to operate a nail salon business. The Division alleged in the Consent Order that the company had failed to comply with the registration and disclosure document provisions of the Franchise Investment Protection Act. Da-Vi Nails International, LLC agreed, without admitting or denying findings of fact, to cease offering or selling franchises in violation of those provisions. Da-Vi Nails International, LLC, among other things, agreed to reimburse the Securities Division $1,125 for its costs of investigation. Da-Vi Nails International, LLC also waived its right to a hearing or other further proceedings in the matter.
Katherine Swanberg - S-09-133-10-CO01 - Consent Order
On March 9, 2010, the Securities Division entered into a Consent Order with Katherine Swanberg. The Securities Division had previously entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Impose Fines, and Recover Costs (“Statement of Charges”) against Laguna S.A., Jill Jensen Ames, Katherine Swanberg, and Jeff Finch (collectively “Respondents”) on December 23, 2009. The Statement of Charges alleged that Respondents raised $820,000 by offering an investment contract involving land in Nicaragua to 15 investors, most of whom were Washington residents. The Statement of Charges alleged that Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. In settling the matter, Respondent Swanberg neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act. Respondent Swanberg agreed to pay a fine of $5,000. Respondent Swanberg waived her right to a hearing and judicial review of the matter.
Kevin P. Dilley - S-07-392-08-CO01 - Consent Order
On February 25, 2010 the Securities Division entered into a Consent Order with Kevin P. Dilley of Spokane, Washington. The Securities Division had entered a Statement of Charges against Mr. Dilley on April 9, 2008 alleging that Mr. Dilley, a former registered securities salesperson in the State of Washington, received money from customers, did not make the promised investments, and failed to return their money. The Statement of Charges further alleged that Mr. Dilley offered and sold unregistered securities in Washington State and violated the registration and anti-fraud provisions of the Securities Act. On November 10, 2009 Mr. Dilley pleaded guilty to one count of riot and seven counts of money laundering in Spokane County Superior Court and was sentenced to twelve months in a correctional facility for crimes committed against one of the investors described in the Statement of Charges. In settling the matter, Mr. Dilley neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act. Mr. Dilley waived his right to a hearing and judicial review of the matter.
Joshua Poulson, Mayela Poulson and Poulson Investing, LLC - S-07-565-08-CO01 - Consent Order
On February 24, 2010, the Securities Division entered into a Consent Order with Poulson Investing, LLC, Joshua Poulson and Mayela Poulson. The Securities Division alleged that Respondents offered and sold securities in the form of promissory notes. Respondents told investors that they would earn 2% per month and that the investments would be secured by real estate. Respondents raised at least $90,000 from at least 3 Washington investors. The Order further alleges that Respondents violated the registration and anti-fraud provisions of the Securities Act while offering and selling said securities. Respondents agreed to cease and desist from future violations. Respondents waived their rights to a hearing and to judicial review of this matter.
A Statement of Charges was issued in this matter on June 29, 2009.
BCD Restaurants, Inc. and Hee Sook Lee, Respondents - S-09-106-09-CO01 - Consent Order
On February 22, 2010, the Securities Division entered into a Consent Order with BCD Restaurants, Inc. and Hee Sook Lee, the company’s founder and President. The Division alleged that the Respondents sold a franchise in the state of Washington prior to filing a registration application with the Securities Division and that it had not complied with disclosure document requirements. The franchise involves a business called BCD Tofu House which involves restaurants which specialize in the preparation and sale of Korean-style tofu and related menu items. The Respondents agreed in the order to comply with the registration and disclosure document provisions of the Franchise Investment Protection Act in the future and also agreed to reimburse the Securities Division $750 for its costs of investigation in the matter. The Respondents also waived their rights to a hearing or other further proceedings in this matter.
Garage Floor Coating Franchise System, Inc., Robert Hanson - S-09-208-09-SC01 - Corrected Statement of Charges
On February 19, 2010, the Securities Division entered a Corrected Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Order Number S-09-208-09-SC01 (the “Statement of Charges”) against Garage Floor Coating Franchise System, Inc. and Robert Hanson. Garage Floor Coating Franchise System, Inc. is the seller of an opportunity involving concrete coating utilizing, in part, a polyurethane coating to beautify and to protect concrete against weathering, cracking, oil and chemicals. The Statement of Charges alleges that Garage Floor Coating Franchise System, Inc. and Robert Hanson failed to comply with the registration provision of the Franchise Investment Protection Act. Garage Floor Coating Franchise System, Inc. and Robert Hanson have the right to request a hearing on the Statement of Charges.
A Consent Order was entered in this matter on April 6, 2010.
Michael Laine and LiftPort, Inc. - S-06-077-09-CO01 - Consent Order
On February 16, 2010, the Securities Division entered into a Consent Order with Liftport, Inc. and Michael Laine (“Respondents”). The Securities Division alleged that Respondents raised at least $117,000 from at least 85 investors, nine of whom are Washington residents, by offering and selling unregistered securities in the form of common stock in Liftport, Inc., a company formed for the purpose of developing a space elevator. The Securities Division alleged that the Respondents acted as an unregistered broker-dealer and/or securities salesperson. The Division also alleged that the offer and sale of securities by the Respondents violated the anti-fraud provisions of the Securities Act of Washington. Respondents agreed to cease and desist from future violations. Respondents waived their rights to a hearing and to judicial review of this matter.
A Statement of Charges was entered in this matter on April 18, 2007.
William S. Bennett, Jr. - S-10-032-10-SC01 - Statement of Charges
On February 8, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Deny Future Securities Salesperson Registration against William S. Bennett, Jr. Bennett was registered with the Securities Division as a securities salesperson for NYLife Securities from October of 1992 until his termination by NYLife Securities in January of 2010. On December 15, 2009, Bennett pled guilty to one felony count of theft of federal government funds in United States District Court, Western District of Washington. The Statement of Charges alleges that Bennett’s guilty plea justifies the Notice of Intent to Deny Future Securities Salesperson Registration by Bennett. The Respondent has a right to request a hearing on the Statement of Charges.
A final order was entered in this matter on March 16, 2010
Mill Creek Development LLC; John Tomasello; John D’Arcy - S-09-403-09-SC01 - Statement of Charges
On February 2, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines and Charge Costs against Mill Creek Development, LLC and its principals John Tomasello, and John D’Arcy. Mill Creek Development is a real estate development firm. The Statement of Charges alleges that D’Arcy, acting on behalf of Mill Creek Development, offered and sold three promissory notes to a retired Washington couple totaling $375,000 between 2004 and 2008. Respondents violated the registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order the Respondents to cease and desist from violating the Securities Act of Washington and gives notice of its intent to impose a fine and recover costs. The Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order was entered on June 11, 2010.
Progolf International, Inc.; Ron Davies - S-09-419-09-SC01 - Statement of Charges
On February 2, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Issue an Order to Cease and Desist, Impose Fines, and Charge Costs against Progolf International, Inc. and Ron Davies (collectively “Respondents”). The Statement of Charges alleges that Respondents offered and sold investments, in the form of promissory notes, to two investors located in Washington. Respondents raised $250,000, which was used as working capital by Respondent Progolf International, Inc., a California corporation, to manufacture the “icady” product. The Statement of Charges alleges that Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division ordered Respondents to cease and desist from violating the securities registration, broker-dealer and/or securities salesperson registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division gave notice of its intent to collect fines and charge costs. Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order was entered regarding this matter on August 17, 2011.
AIG Promotions, LLC - S-09-450-09-SC01 - Statement of Charges
On February 2, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist against AIG Promotions, LLC, and Davidan Corporation, d/b/a Bankcard Empire (collectively “Respondents”). Respondents are sellers of a business opportunity that involves the leasing of merchant credit card processing machines. The Statement of Charges alleges that Respondents offered and sold this business opportunity to at least one Washington resident while not registered under the Business Opportunity Fraud Act of Washington, RCW 19.110. The Statement of Charges further alleges that Respondents failed to provide material information and disclosure documents regarding the business opportunity. The Securities Division intends to order the Respondents to cease and desist from violating the provisions of the Business Opportunity Fraud Act of Washington. Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order was entered in this matter on April 26, 2010.
A Final Order was entered April 23, 2010 in the Davidan Corporation, d/b/a Bankcard Empire matter.
Robert Malecki, Homeowner Resources LLC, Kitsap Private Lending Group LLC – S-08-347-09-SC01 – Statement of Charges
On February 2, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Recover Costs against Robert Malecki, Homeowner Resources LLC, and Kitsap Private Lending Group LLC (collectively “Respondents”). The Statement of Charges alleges that Respondents offered and sold investments in the form of private mortgage loans to multiple lenders on the same property. The Statement of Charges alleges that Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order Respondents to cease and desist from violating the Securities Act of Washington, and gave notice of its intent to impose fines and recover costs. The Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order was entered regarding this matter on January 20, 2011
Sally Jean Gray – S-08-263-09-SC01 - Statement of Charges
On February 2, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Deny Future Registration against Sally Jean Gray ("Respondent"). The Statement of Charges alleges that Respondent engaged in dishonest or unethical practices in the securities business by borrowing at least $230,000 from three clients over approximately a two year time period. The Securities Division seeks to deny future registration of the Respondent in Washington. The Respondent has a right to request a hearing on the Statement of Charges.
A Final Order was entered regarding this matter on June 1, 2015.
Little Loan Shoppe Ltd.; Little Loan Shoppe America, LLC; 639504 BC, Ltd.; Little Loan Shoppe Canada, LLC; 0738106 BC, Ltd.; 0738116 BC, Ltd.; 0738126 BC, Ltd.; LLS America, LLC; LLS-A, LLC (WA); Pacific LLS, LLC; Atlantic LLS, LLC; Eastern LLS, LLC; Central LLS, LLC; LLS-A, LLC (NV); LLS-NW, LLC; LLS-US, LLC; Doris Nelson; and Paul Cooper - S-09-216-09-SC01 – Statement of Charges
On January 28, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Impose Fines, and Charge Costs against Little Loan Shoppe Ltd.; Little Loan Shoppe America, LLC; 639504 BC, Ltd.; Little Loan Shoppe Canada, LLC; 0738106 BC, Ltd.; 0738116 BC, Ltd.; 0738126 BC, Ltd.; LLS America, LLC; LLS-A, LLC (WA); Pacific LLS, LLC; Atlantic LLS, LLC; Eastern LLS, LLC; Central LLS, LLC; LLS-A, LLC (NV); LLS-NW, LLC; LLS-US, LLC; Doris Nelson; and Paul Cooper (collectively “Respondents”). Respondents offered investments in the form of promissory notes which Respondents claimed would be used to fund the operations and expansion of a payday/installment loan company. The Statement of Charges alleges that at least 300 investors worldwide invested approximately $29 million U.S. dollars and $26 million Canadian dollars with Respondents, including over $6 million dollars from at least 35 Washington residents. The Statement of Charges alleges that Respondents offered unregistered securities, acted as unregistered broker-dealers or securities salespersons, and violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division intends to order Respondents to cease and desist from violating the Securities Act of Washington, and gives notice of its intent to impose fines and charge costs. Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order was entered regarding this matter on August 8, 2016.
Education Comics LLC and Diane Russomanno - S-08-102-10-SC01 - Statement of Charges
On January 28, 2010, the Securities Division entered a Statement of Charges against Respondents, Education Comics LLC (“Education Comics”) and Diane Russomanno (“Russomanno”), the company’s Chief Executive Officer. Education Comics is located in Agoura Hills, California. The Securities Division alleged that Education Comics and Russomanno each offered and sold more than $500,000 worth of investments in Education Comics to more than twenty Washington investors. The investments were to be used to develop and market a series of educational comic books called “The Adventures of Scooter McDoogal.” The Securities Division alleged that the investments were securities that were not registered and that Russomanno was not registered as a securities salesperson or securities broker-dealer. The Securities Division also alleged that when offering and selling the securities, Respondents each misrepresented or each failed to disclose material information, including financial information about the company and the risks of the investments.
A Final Order was entered in this matter on April 28, 2010.
Jason Scott Sant, now known as Jim Brick - S-07-574-10-FO01 - Final Order
On January 27, 2010, the Securities Division entered an Entry of Findings of Fact and Conclusions of Law and Final Order to Cease and Desist and to Charge Costs (“Final Order”) against Jason Scott Sant (“Sant”), Respondent, who is now known as Jim Brick. The Final Order ordered Sant to cease and desist from violating the securities registration section, the securities broker-dealer and securities salesperson registration section, and the anti-fraud section of the Securities Act of Washington. The Securities Division also ordered Sant to pay investigative costs of $3,000. Respondent, Sant, has the right to petition the superior court for judicial review.
Bruce McCurdy, Malibu Development Corporation, The Meridian on Bainbridge Island LLC - S-06-065-08-CO04 – Consent Order
On January 27, 2010 the Securities Division entered into a Consent Order with Bruce McCurdy, Malibu Development Corporation, and The Meridian on Bainbridge Island LLC. The Securities Division had entered a Summary Order against Malibu Development Corporation; The Meridian on Bainbridge Island LLC; CMHCEH LLC; John M. Erickson; Bruce McCurdy; Christopher M. Heins; and Michael B. Reetz, (collectively “Respondents”) on June 8, 2007. The Securities Division alleged Respondents raised at least $3 million from at least 61 investors, the majority of whom were Washington residents, by offering and selling unregistered promissory notes represented to be secured by real estate. The Securities Division alleged that the offer and sale of securities by the Respondents violated the anti-fraud provisions of the Securities Act of Washington. The Securities Division further alleged that certain Respondents acted as unregistered broker-dealers or securities salespersons. In settling the matter, Respondents Bruce McCurdy, Malibu Development Corporation, and The Meridian on Bainbridge Island LLC neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act. Respondent McCurdy agreed that he will not to apply for nor be granted a license as a broker-dealer, securities salesperson, investment adviser, or investment adviser representative in the State of Washington for a period of ten (10) years following the date of entry of the consent order. Respondent McCurdy agreed to pay a fine of $10,000 and investigative costs of $5,000. Bruce McCurdy, Malibu Development Corporation, and The Meridian on Bainbridge Island LLC each waived the right to a hearing and judicial review of the matter.
Michael W. Conrad and Wooly Rhino, LLC - S-09-039-09-FO02 - Final Order
On January 27, 2010, the Securities Division entered a Final Order against Michael W. Conrad and his company, Wooly Rhino, LLC (“Respondents”). The Securities Division previously entered a Statement of Charges against the Respondents on November 24, 2009. The Statement of Charges alleged that between May 2007 and October 2008, approximately $2 million worth of Integrated Fuel Technologies, Inc. (“IFT”) common stock was sold to approximately 60 investors, the majority of whom were in Washington. The Securities Division alleged that the Respondents offered and sold IFT stock and violated the registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division orders Respondents Michael W. Conrad and Wooly Rhino, LLC to cease and desist from violating the Securities Act of Washington, to pay a fine of $10,000, and investigative costs of $1,500. Respondents Michael W. Conrad and Wooly Rhino, LLC have a right to request judicial review of the Final Order.
Thomas Doncaster - S-06-137-08-SC01 - Statement of Charges
On January 26, 2010, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Impose Fines, and to Charge Costs, S-06-137-08-SC01, against Thomas Doncaster. The Statement of Charges alleges that Mr. Doncaster offered and sold to customers, some of whom were elderly, variable annuities which were unsuitable. It is also alleged that Mr. Doncaster falsified account applications, provided clients with unauthorized financial projections, and engaged in other misleading conduct. The Statement of Charges alleges that Mr. Doncaster violated the licensing, suitability, and anti-fraud provisions of the Securities Act while offering and advising with regard to securities. Mr. Doncaster has a right to request a hearing on the Statement of Charges.
A Consent Order regarding this matter was entered on November 10, 2011.
Adam G. Kremin - S-09-039-09-FO01 - Final Order
On January 26, 2010, the Securities Division entered a Final Order against Adam G. Kremin (“Kremin”). The Securities Division previously entered a Statement of Charges against Kremin on November 24, 2009. The Statement of Charges alleged that between May 2007 and October 2008, approximately $2 million worth of Integrated Fuel Technologies, Inc. (“IFT”) common stock was sold to approximately 60 investors, the majority of whom were in Washington. The Securities Division alleged that Respondent Adam G. Kremin offered and sold IFT stock and violated the registration and anti-fraud provisions of the Securities Act of Washington. The Securities Division orders Respondent Adam G. Kremin to cease and desist from violating the Securities Act of Washington, to pay a fine of $5,000, and to pay investigative costs of $500. Respondent Adam G. Kremin has a right to request judicial review of the Final Order.
Merrill Lynch, Pierce, Fenner & Smith Incorporated - S-09-397-09-CO01 - Consent Order
On January 25, 2010, the Securities Division entered into a Consent Order with Merrill Lynch, Pierce, Fenner & Smith Incorporated (“Respondent”), in connection with Respondent’s alleged failure to properly register its Client Associates in necessary jurisdictions, including Washington State. The Division alleged that Respondent failed to reasonably supervise its agents by not establishing an adequate system to monitor the registration status of persons accepting client orders and by not enforcing its established written procedures regarding the registration requirements of Client Associates. The Division further alleged that such conduct resulted in Respondent’s employment of unregistered securities salespersons. Respondent neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act of Washington. Respondent agreed to pay $490,320 as a civil monetary penalty. Respondent waived its right to a hearing and to judicial review of this matter.
Jared Smidt - S-08-041-10-CO04 – Consent Order
On January 25, 2010, the Securities Division and Respondent, Jared Smidt (“Smidt”), entered into a Consent Order. The Securities Division alleged that Smidt, Vice President of Brothers Northwest Investments, Inc., violated the anti-fraud provisions of the Securities Act of Washington by offering and selling promissory note and deed of trust investments without disclosing material information about the investments. Without admitting or denying the violations, Smidt agreed to cease and desist from any violation of RCW 21.20.010, the anti-fraud section of the Securities Act of Washington. Smidt waived his right to a hearing and to judicial review of the matter.
A Statement of Charges was issued in this matter on June 29, 2009.
IFT Holdings, Inc., f/k/a Integrated Fuel Technologies, Inc. - S-09-039-09-CO01 – Consent Order
On January 25, 2010, the Securities Division entered into a Consent Order with IFT Holdings, Inc., f/k/a Integrated Fuel Technologies, Inc. (“IFT”). The Securities Division previously entered a Statement of Charges on November 24, 2009. IFT was in the business of developing emission control technology. The Statement of Charges alleged that between May 2007 and October 2008, approximately $2 million worth of IFT common stock was sold to approximately 60 investors, the majority of whom were in Washington. The Securities Division alleged that IFT violated the registration and anti-fraud provisions of the Securities Act of Washington. In settling the matter, IFT neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act. IFT waived its right to a hearing and judicial review of the matter.
Donald E. Jacoy – S-07-372-08-CO01 – Consent Order
On January 19, 2010, the Securities Division entered into a Consent Order with Donald E. Jacoy (“Respondent”). The Securities Division had previously alleged that Respondent, doing business as Filter Technology of America Inc. and Cooking Oil Filtering Systems of America Inc., offered and sold investments in a start-up company founded to distribute and sell cooking oil filtration systems manufactured and produced by Filter Technology of Australia. Respondent and others raised at least $280,000 from at least four investors, one of whom was a Washington resident. The Securities Division alleged that Respondent offered and sold unregistered securities; acted as an unregistered securities broker-dealer and securities salesperson; and violated the anti-fraud section of the Securities Act of Washington by making untrue statements of material fact or by omitting to state material facts when offering and selling the investments. Respondent agreed to cease and desist from future violations and pay investigation costs of $2,000. Respondent waived his right to a hearing and to judicial review of this matter.
A Statement of Charges was issued in this matter on December 14, 2007.
JPMorgan Chase & Co. - S-09-196-09-CO01 - Consent Order
On January 13, 2010, the Securities Division entered into a Consent Order with JPMorgan Chase & Co. (“Respondent”), in order to settle the allegations that Respondent engaged in unethical practices in the sale of auction rate securities (“ARS”), and failed to supervise reasonably its salespersons in the marketing and sale of ARS. Respondent neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act of Washington. Respondent agreed to offer to purchase at par ARS that since February 12, 2008 have not been auctioning from individual investors who purchased those ARS from Respondent prior to February 12, 2008. Respondent agreed to pay $224,424.14 as a civil monetary penalty. Respondent waived its right to a hearing and to judicial review of this matter.
Morgan Stanley & Co. Incorporated - S-09-401-09-CO01 - Consent Order
On January 13, 2010, the Securities Division entered into a Consent Order with Morgan Stanley & Co. Incorporated (“Respondent”), in order to settle the allegations that Respondent engaged in dishonest or unethical practices in the sale of auction rate securities (“ARS”), and failed to supervise reasonably its salespersons in the marketing and sale of ARS. Respondent neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act of Washington. Respondent agreed to offer to purchase at par ARS that were not clearing as of September 30, 2008 from retail investors who purchased those ARS from Respondent prior to February 13, 2008. Respondent agreed to pay $591,018.50 as a civil monetary penalty. Respondent waived its right to a hearing and to judicial review of this matter.
Michael R. Mastro, doing business as Mastro Properties - S-09-038-09-CO01 - Consent Order
On January 8, 2010, the Securities Division entered into a Consent Order with Michael R. Mastro (“Respondent”). The Securities Division alleged that Respondent, doing business as Mastro Properties, offered and sold more than $100 million worth of investments, in the form of demand promissory notes, to more than 175 investors. The Securities Division alleged that Respondent issued the notes in order to raise capital for his business as a real estate lender and developer. The Securities Division alleged that Respondent offered and sold more than $100 million of unregistered securities. The Securities Division alleged that Respondent violated the securities broker-dealer and securities salesperson registration section of the Securities Act of Washington. The Securities Division alleged that Respondent violated the anti-fraud section of the Securities Act of Washington by making untrue statements of material fact or by omitting to state material facts when offering and selling the investments. The Securities Division revoked certain of Respondent’s exemptions from registration of securities under the Act as well. The Securities Division also imposed a $100,000 fine against Respondent, but payment of the fine is to be deferred until the Mastro promissory note investors have been repaid in full.
A Statement of Charges was issued in this matter on October 01, 2009.
Bruce Schmidt – S-08-041-09-CO03 – Consent Order
On January 4, 2010, the Securities Division and Respondent, Bruce Schmidt (“Schmidt”), entered into a Consent Order. The Securities Division alleged that Schmidt, doing business as president of Brothers Northwest Investments, Inc. in Tacoma, Washington, violated the anti-fraud provisions of the Securities Act of Washington by offering and selling note and deed of trust investments without disclosing material information about the investments. Without admitting or denying the allegations, Schmidt agreed to cease and desist from any violation of RCW 21.20.010, the anti-fraud section of the Securities Act of Washington. Schmidt waived his right to a hearing and to judicial review of the matter.
A Statement of Charges was issued in this matter on June 29, 2009.