Orders From Other Years
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David Hopp, dba Oddmall Seattle - S-22-3433-22-SC01 - Statement of Charges
On December 14, 2022, the Securities Division entered a Statement of Charges and Notice of Intent to Issue an Order to Cease and Desist against David Hopp, dba Oddmall Seattle (the “Respondent” or “Hopp”). The Securities Division alleged that since 2021, Hopp has offered and sold unregistered franchises of his themed artisan/craft show, Oddmall, to Washington residents. Hopp targeted artists and vendors when offering the right to produce the Oddmall shows in Washington regions in exchange for royalty fees paid to Hopp. At least two Washington residents entered franchise agreements for regions in Western Washington. The Securities Division further alleges that the Respondent failed to provide prospective franchisees with a current disclosure document, containing material information about the franchise. The Securities Division gave notice of its intent to issue an order to the Respondent to permanently cease and desist from violating the Franchise Investment Protection Act of Washington. The Respondent has a right to request a hearing on the Statement of Charges.
A Consent Order was entered regarding this matter on February 8, 2023.
Wynston Hill Capital LLC - S-21-3253-22-SC01 - Statement of Charges
On December 14, 2022, the Securities Division entered a Statement of Charges and Notice of Intent to Deny Future Registrations against South Dakota-based Wynston Hill Capital, LLC (“Wynston Hill”). Wynston Hill was registered with the Securities Division as a broker-dealer until its registration was terminated on January 18, 2022. The Statement of Charges alleges that the Financial Industry Regulatory Authority (“FINRA”) expelled Wynston Hill when it failed to request the termination of its suspension or a hearing in the period allowed by FINRA rules. The securities administrators of Maryland and South Dakota also issued orders revoking Wynston Hill’s membership after giving the firm notice and the opportunity for a hearing. The Securities Division concluded that the FINRA expulsion and the two state orders justify the denial of any broker-dealer or investment adviser registration that Wynston Hill may seek in the future. Wynston Hill has a right to request a hearing on the Statement of Charges.
A Final Order was entered regarding this matter on January 25, 2024.
Quantum Donovan LLC, Shane Moore - S-22-3425-22-SC01 - Statement of Charges
On December 9, 2022, 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 (“Statement of Charges”) against Quantum Donovan LLC and Shane Moore (collectively, “Respondents”). The Statement of Charges alleges that the Respondents violated the registration and anti-fraud provisions of the Securities Act of Washington when they offered and sold investments to investors in Washington and other states. 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 to charge costs. Respondents each have a right to request a hearing on the Statement of Charges.
A Final Order was entered regarding this matter on January 19, 2023.
John Winslow - S-21-3243-22-CO02 - Consent Order
On December 8, 2022, the Securities Division entered into a Consent Order with John Winslow, (“Respondent”) of Fox Island, Washington. The Securities Division previously entered a Statement of Charges against Winslow on September 27, 2022. Winslow was previously an investment adviser representative and securities salesperson at Edward D. Jones & Co., L.P. In settling the matter, the Respondent neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act. The Respondent further agreed to pay a fine of $75,000 and reimburse the Securities Division $15,000 for its costs of investigation. The Respondent waived his right to a hearing and to judicial review of the matter.
Northlake Capital & Development LLC; 183rd Shoreline Apartments, LLC; James W. Thorpe; Seth T. Heck - S-20-2995-22-CO01 - Consent Order
On December 6, 2022, the Securities Division entered into a Consent Order with Northlake Capital & Development LLC; 183rd Shoreline Apartments, LLC; James W. Thorpe; and Seth T. Heck (“Respondents”). During 2018, the Respondents offered and sold at least $1.1 million worth of investments in 183rd Shoreline Apartments, LLC, an apartment development project in Shoreline, Washington, to at least five investors. In addition, between 2018 and 2020, the Respondents offered and sold a total of more than $15 million worth of real estate promissory note investments to at least 28 investors. The Respondents each failed to disclose material risks of the investments, including the failure to secure the investments; the commingling of investor funds; the failure of prior real estate development projects; and the prior bankruptcy of James W. Thorpe. The Securities Division ordered the Respondents to cease and desist from violating the Securities Act of Washington. The Securities Division imposed a fine of $5,000 against Heck; a fine of $25,000 against Thorpe; and $10,000 in costs. The Respondents each waived their right to a hearing and judicial review of this matter.
Shu-Mei Wang - S-20-2995-22-CO02 - Consent Order
On December 5, 2022, the Securities Division entered into a Consent Order with Shu-Mei Wang. During 2018, Wang offered at least $1.1 million worth of investments in 183rd Shoreline Apartments, LLC, an apartment development project in Shoreline, Washington, to at least five investors. In addition, between 2018 and 2020, Wang offered and/or sold a total of more than $15 million worth of real estate promissory note investments to at least 28 investors. Wang offered and/or sold the investments without disclosing material risks of the investments, including the failure to secure the investments; the commingling of investor funds; the failure of prior real estate development projects; and the prior bankruptcy of the developer. The Securities Division ordered Wang to cease and desist from violating the Securities Act of Washington. The Securities Division also imposed a fine of $10,000 against Wang. Wang waived her right to a hearing and judicial review of this matter.
SFA Commercial LLC - S-20-2952-21-CO01 - Consent Order
On December 5, 2022, the Securities Division entered a Consent Order against SFA Commercial LLC (“SFAC”). In the Consent Order, the Securities Division alleged that SFAC offered and sold at least $38 million in investment certificates to at least 292 investors from February 2013 to at least January 2022. At least 20 of these investors were Washington residents who collectively invested over $2.4 million. In offering and selling these investments, the Division alleged that SFAC failed to disclose certain financial information to potential investors, including the existence of owner distributions and management fees totaling over $8.5 million that SFAC paid to related-party entities. SFAC also allegedly failed to disclose nearly $2 million that it had borrowed from certain co-owners of SFAC. The Division alleged in the Consent Order that SFAC’s omission of the above material information to potential investors violated the anti-fraud section of the Securities Act of Washington (“Securities Act’). By entering into the Consent Order, SFAC neither admitted nor denied the Division’s allegations contained in the Consent Order. SFAC further agreed to cease and desist from violating the Securities Act, and to pay an administrative fine of $15,000 and investigative costs of $5,000. SFAC also waived its right to an administrative hearing on and judicial review of this matter.
Edward D. Jones & Co., L.P. - S-21-3242-22-CO01 - Consent Order
On November 11, 2022, the Securities Division entered into a Consent Order with Edward D. Jones & Co., L.P. (“Edward Jones”). The Consent Order that Edward Jones failed to adequately supervise John Winslow, who was formerly a securities salesperson and investment adviser representative at the firm. In settling the matter, Edward Jones neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act. Edward Jones further agreed to pay a fine of $150,000 and reimburse the Securities Division $25,000 for its costs of investigation. Edward Jones waived its right to a hearing and to judicial review of the matter.
Viet-An Hoan Ly; TangleTrade Management; Inception Capital Management – S-18-2423-20-CO01 - Consent Order
On November 1, 2022, the Securities Division entered into a Consent Order with Respondents Viet-An Hoan Ly (“Ly”), TangleTrade Management, and Inception Capital Management (collectively “the Respondents”). The Securities Division had previously issued a Statement of Charges against the Respondents, alleging violations of the Securities Act of Washington’s investment adviser registration provision, securities registration provisions, performance fee regulations, and multiple antifraud provisions. In the Consent Order, the Respondents neither admitted nor denied the Securities Division’s Findings of Fact and Conclusions of Law, but agreed to cease and desist from violating the charged provisions of the Securities Act of Washington. The Respondents further agreed that any application for registration with the Securities Division would be denied for two years from the date of entry of the order. The Respondents agreed to pay a fine of $10,000 and investigative costs of $40,000, and waived their right to a hearing and to judicial review of this matter.
Gunn Capital Management, LLC and Cody D. Gunn – S-22-3414-22-CO01 - Consent Order
On October 20, 2022, the Securities Division entered into a Consent Order with Gunn Capital Management, LLC and Cody D. Gunn (“Respondents”). The Securities Division found that the Respondents had failed to disclose that they had custody over client funds and failed to file a timely notice of a pending lawsuit. Without admitting or denying the allegations, the Respondents agreed to cease and desist from any violation of WAC 460-24A-105 and WAC 460-24A-205. The Respondents were jointly and severally liable for and paid a fine of $10,000. The Respondents each waived their right to a hearing and judicial review of this matter.
F45 Training Inc. - S-19-2681-19-CO01 - Consent Order
On October 18, 2022, the Securities Division entered into a Consent Order with F45 Training, Inc. (“Respondent”). The Securities Division alleges that Respondent made unlawful and unsupported financial performance representations to prospective Washington franchisees between November 2015 and December 2019. Particularly, Respondent claimed, through advertising, web videos, and direct communications, and without providing a reasonable basis or substantiation of these claims, that franchisees could quickly achieve high profits if they purchased and operated one of Respondent’s franchised locations. Respondent also omitted material information when it claimed to prospective franchisees during its sales process that nearby units were successful, including by failing to inform prospective franchisees that these locations were not profitable as of that time. The Securities Division additionally alleges the Respondent made untrue statements of material fact and/or omitted material facts to the Division when it stated in its franchise registration filings that it did not provide financial performance representations to prospective franchisees, while at the same time making these representations during its sales process.
As additional violations, the Securities Division alleges that Respondent failed to disclose, as required in the franchise disclosure document, that it had paid certain public figures, who were players, a coach, and a team owner in the National Basketball Association, to promote sales of its franchise units, and that Respondent was in violation of the law when it required prospective franchisees to make certain payments to it before it provided them with its current franchise disclosure document. Further, the Securities Division alleges that Respondent was in violation of the RCW 19.100.180, the Franchisee Bill of Rights, when it terminated a Washington franchisee shortly after the franchisee was identified as a leader in a newly-formed F45 franchisee association, thus inhibiting the franchisee’s right under the law to join such an association. Without admitting or denying the Securities Division’s allegations, Respondent agreed to cease and desist from violations of RCW 19.100.170, the violations section of the Franchise Investment Protection Act of Washington; RCW 19.100.080, the franchise disclosure document section of the Franchise Investment Protection Act of Washington; and RCW 19.100.180, the franchisee bill of rights section of the Franchise Investment Protection Act of Washington. Respondent also agreed to pay $15,437.50 to the Division in investigative cost recovery, and to send a copy of this order and an offer to rescind the franchise agreement to all franchisees who entered into a franchise agreement in Washington before December 31, 2019. Respondents waived their rights to a hearing and judicial review of the matter.
Ideal Siding Franchising (USA) Inc. – S-22-3385-22-CO01 - Consent Order
On October 11, 2022, the Securities Division entered into a Consent Order with Ideal Siding Franchising Inc. In the Consent Order, the Division alleged that Respondent violated the Franchise Investment Protection Act of Washington (the Act) by offering unregistered franchises in Washington. Without admitting or denying the allegations, Respondent agreed to cease and desist from violating the Act, and to pay $3,000 in investigative costs. The Respondent has waived their rights to a hearing and judicial review of this matter.
Pro-Lift Doors Franchise, LLC - S-22-3399-22-CO02 - Consent Order
On October 4, 2022, the Securities Division entered into a Consent Order with Pro-Lift Doors Franchise, LLC. In the Consent Order, the Securities Division alleged that Pro-Lift Doors Franchise, LLC violated the Franchise Investment Protection Act by offering and selling franchises in Washington while failing to disclose material facts, including prior litigation. Without admitting or denying the Securities Division’s allegations, Pro-Lift Doors Franchise, LLC agreed to cease and desist from violating the Franchise Investment Protection Act. Pro-Lift Doors Franchise, LLC agreed to pay investigative costs of $2,000 and waived its right to a hearing and judicial review of the matter.
360 Painting, LLC - S-22-3399-22-CO01 - Consent Order
On October 4, 2022, the Securities Division entered into a Consent Order with 360 Painting, LLC. In the Consent Order, the Securities Division alleged that 360 Painting, LLC violated the Franchise Investment Protection Act by offering and selling franchises in Washington while failing to disclose material facts, including prior litigation. Without admitting or denying the Securities Division’s allegations, 360 Painting, LLC agreed to cease and desist from violating the Franchise Investment Protection Act. 360 Painting, LLC agreed to pay investigative costs of $2,000 and waived its right to a hearing and judicial review of the matter.
Jason Allen Greig, a.k.a. Jason Greig, a.k.a. Jay Greig, a.k.a. J. Greig, The Greig Companies, Inc. and Datassure Corporation - S-20-2899-22-FO01 - Final Order
On September 29, 2022, the Securities Division entered a Final Order to Cease and Desist against Jason Allen Greig, a.k.a. Jay Greig, a.k.a. Jason Greig, a.k.a. J. Greig (“Greig”) of Ferndale, Washingon, The Greig Companies, Inc. and Datassure Corporation (“Respondents”). The Securities Division had previously issued a Statement of Charges against the Respondents in which it was alleged that Greig and The Greig Companies offered and sold unregistered securities. The Securities Division alleged that the Respondents misrepresented and/or failed to disclose material facts in the offer of securities. The Securities Division alleged that Jason Allen Greig acted as an unregistered broker or salesperson in the offer of a security. The Securities Division has ordered Jason Allen Greig, a.k.a. Jay Greig, a.k.a. Jay Greig, a.k.a. J. Greig, The Greig Companies, Inc. and Datassure Corporation to cease and desist from violations of anti-fraud and registration provisions of the Securities Act. Jason Allen Greig is ordered to pay a $20,000 fine and $15,000 for the costs of the investigation. The Respondents have a right to request judicial review of the Final Order.
David Snavely (CRD#2030866) – S-20-2957-22-CO01 - Consent Order
On September 28, 2022, the Securities Division entered into a Consent Order with David Snavely, CRD #2030866. The Division had previously entered a Statement of Charges against Snavely on December 7, 2021. The Securities Division alleged in the Consent Order that Snavely violated the Securities Act of Washington when he sold unsuitable variable annuity exchanges to some of his customers. Without admitting or denying the Securities Division’s allegations, Snavely agreed to cease and desist from violating RCW 21.20.702, the suitable recommendations provision of the Securities Act. Snavely also agreed to a two year suspension, served retroactively, and to pay a $15,000 fine and $1,000 in costs. Snavely waived his right to a hearing and judicial review of this matter.
John Winslow – S-21-3243-21-SC01 - Statement of Charges
On September 27, 2022, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Deny Future Registrations, to Impose a Fine, and to Charge Costs (“Statement of Charges”) against John Winslow (“Respondent”) of Fox Island, Washington. Winslow was previously an investment adviser representative and securities salesperson at Edward D. Jones & Co., L.P. The Statement of Charges alleges that the Respondent violated the anti-fraud provisions of the Securities Act of Washington in connection with funds that he received from an elderly client. The Statement of Charges further alleges that Winslow engaged in dishonest and unethical practices by borrowing money from a customer. The Securities Division intends to order the Respondent to cease and desist from violating the Securities Act of Washington and gives notice of its intent to deny future registrations, impose a fine, and to charge costs. The Respondent has a right to request a hearing on the Statement of Charges.
Nexo Inc., Nexo Capital, Inc., and Antoni Trenchev - S-21-3225-22-SC01 - Statement of Charges.
On September 26, 2022, 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 Nexo Inc., Nexo Capital Inc., and Antoni Trenchev (collectively, the “Respondents” or “Nexo”). The Securities Division alleged that beginning in June 2020 and continuing to the present, Nexo offered and sold unregistered securities in the form of the Nexo Earn Interest Product (“EIP”) to at least 2,368 Washington residents valued at over $32 million (as of the end of July 2022). The Securities Division alleged that Nexo represented to EIP customers that they could earn interest income on certain virtual currencies that they deposited into their EIP, and that to generate this interest income, Nexo used EIP virtual currencies to lend to institutional borrowers, among other activities. The Securities Division alleged that the Respondents sold unregistered securities, acted as unregistered securities salespersons, and violated the anti-fraud provision of the Securities Act of Washington. The Securities Division gave notice of its intent to issue an order to Respondents to permanently cease and desist from violating the Securities Act of Washington, to collect fines, and to charge costs. The Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order was entered regarding this matter on February 13, 2023.
J1S Energy, LLC and Kirk Jones – S-19-2622-21-CO01 - Consent Order
On September 12, 2022, the Securities Division entered into a Consent Order with Kirk Jones and J1S Energy, LLC (Respondents). The Division had previously entered a Statement of Charges against Respondents. The Statement of Charges alleged that Respondents, and others, violated the Securities Act when they sold unregistered oil and gas investments totaling about $198,000 to an elderly resident of Chelan County, Washington. The Statement of Charges also alleged that Respondents violated the anti-fraud provision of the Securities Act by failing to disclose material information about the investment to the investor. Without admitting or denying the Securities Division’s allegations, Respondents agreed to cease and desist from violations of the Securities Act. In addition, Jones agreed to pay a fine of $5,000 and investigative costs of $1,500. Respondents each waived their right to a hearing and judicial review of the matter.
Game Kastle Universe LLC – S-22-3386-22-CO01 - Consent Order
On September 6, 2022, the Securities Division entered into a Consent Order for Game Kastle Universe LLC. In the Consent Order, the Division alleged that Respondent violated the Franchise Investment Protection Act of Washington (the Act) by offering and selling unregistered franchises in Washington. Without admitting or denying the allegations, Respondent agreed to cease and desist from violating the Act, and to pay $2,000 in investigative costs. The Respondent has waived their rights to a hearing and judicial review of this matter.
Pinnacle Opportunity Team, LLC and Ryan A. Purdie, - S-19-2652-22-CO01 - Consent Order
On September 6, 2022, the Securities Division entered into a Consent Order with Pinnacle Opportunity Team, LLC (“Pinnacle”), a Washington LLC, and its managing member, Ryan A. Purdie (“Purdie”) (collectively, “Respondents”). Purdie is a California-registered investment adviser representative. The Securities Division alleged that during 2019, Purdie offered and sold membership interests in Pinnacle totaling at least $70,000 to at least four New York investors. Pinnacle has never been registered to sell its securities in Washington. The Securities Division alleged that the Respondents misrepresented the likely return on the investment and failed to disclose material information regarding the investment. The Securities Division alleged that Respondents offered and sold unregistered securities and violated the anti-fraud provision of the Securities Act of Washington. Without admitting or denying the Securities Division’s allegations, the Respondents agreed to cease and desist from violations of RCW 21.20.140, the securities registration section of the Securities Act and RCW 21.20.010, the anti-fraud section. The Securities Division imposed a fine of $2,500. The Respondents each waived their right to a hearing and judicial review of the matter.
AltoTerra Capital Partners Ltd., Leah Kincaid, and Viktor Lawryniuk - S-20-2978-22-SC01 - Statement of Charges
On August 29, 2022, 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 AltoTerra Capital Partners Ltd., Leah A. Kincaid, and Viktor Lawryniuk (collectively, the “Respondents). Respondents offered and sold unregistered stock in AltoTerra Capital Partners Ltd., a company from Burlington, Washington, that leased equipment and real estate to cannabis companies in Oregon and Washington. From July of 2018 and August of 2019, 39 U.S. investors purchased 1,442,286 shares of AltoTerra stock. Thirty-eight of these investors were residents of the state of Washington, and they purchased $707,893 of stock. The Securities Division alleged that the Respondents sold unregistered securities and that Leah Kincaid and Viktor Lawryniuk acted as unregistered securities salespersons. Moreover, the Securities Division alleged that the Respondents violated the anti-fraud provision of the Securities Act of Washington. The Securities Division gave notice of its intent to order the Respondents to cease and desist from violating the Securities Act of Washington and its intent to collect fines and charge costs. The Respondents have a right to request a hearing on the Statement of Charges.
A Consent Order as to Viktor Lawryniuk was entered on January 24, 2023.
21st Century Technologies Group, LLC d/b/a Healthier4U Vending – S-21-3168-22-CO01 - Consent Order
On August 24, 2022, the Securities Division entered into a Consent Order for 21st Century Technologies Group, LLC d/b/a Healthier4U Vending. In the Consent Order, the Division alleged that Respondent violated the Business Opportunity Fraud Act of Washington (the Act) by failing to provide a prospective business opportunity purchaser with a contract that meets the requirements of the Act, namely the provision of a seven-day contract cancellation period. Without admitting or denying the allegations, Respondent agreed to cease and desist from violating the Act, and to pay $6,000 in investigative costs. The Respondent has waived their rights to a hearing and judicial review of this matter.
Second Wind Sports Inc. – S-22-3374-22-CO01 - Consent Order
On August 23, 2022, the Securities Division entered into a Consent Order with Second Wind Sports Inc. In the Consent Order, the Division alleged that Respondent violated the Franchise Investment Protection Act of Washington (the Act) by offering unregistered franchises in Washington. Without admitting or denying the allegations, Respondent agreed to cease and desist from violating the Act, and to pay $1,000 in investigative costs. The Respondent has waived their rights to a hearing and judicial review of this matter.
Jason E. Skifstad - S-20-2974-22-CO01 - Consent Order
On August 22, 2022, the Securities Division entered into a Consent Order with Jason E. Skifstad. The Securities Division had previously entered a Statement of Charges against Jason E. Skifstad on August 27, 2021. The Securities Division had alleged that Skifstad started working at home without obtaining pre-approval for a home office, in violation of firm policy. The Securities Division further alleged that Skifstad resigned from his firm and retained nonpublic personal information of former clients without authorization, including social security numbers and financial account numbers. Without admitting or denying the Securities Division's allegations, Jason E. Skifstad agreed to cease and desist from violations of WAC 460-24A-220 and WAC 460-22B-090. Jason E. Skifstad agreed to pay a fine of $5,000 and investigative costs of $5,000. Jason E. Skifstad waived his right to a hearing and judicial review of the matter.
Osage Pacific Advisors - S-21-3156-22-CO01 - Consent Order
On August 9, 2022, the Securities Division entered into Consent Order S-21-3156-22-CO01 (“Consent Order”) with Osage Pacific Advisors, Inc. (“Respondent”, CRD No. 284257) resolving Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, to Impose a Fine, and to Charge Costs S-21-3156-22-SC01 (“Statement of Charges”). The Statement of Charges alleged that Respondent, a California-registered investment adviser, failed to comply with Washington registration requirements pursuant RCW 21.20.040 of the Securities Act. In the Consent Order, Respondent agreed to cease and desist from violations of RCW 21.20.040 and to pay a fine of $15,000. Respondent waived their right to a hearing and judicial review of the matter.
Rosland Capital LLC – S-20-3045-22-CO01 - Consent Order
On August 4, 2022, the Securities Division entered into a Consent Order with Respondents Rosland Capital LLC and Marin Aleksov. Rosland Capital LLC’s principal place of business is located in Los Angeles, California. From December 2017 through at least April 2021, the Respondents sold more than $1.6 million worth of gold, silver, and platinum coins with delivery delays of more than 28 days after payment to at least 14 Washington customers. The coins were sold to IRA customers who were solicited through telemarketing and through Internet and television advertising. The Securities Division ordered the Respondents to cease and desist from violating the Commodity Act of Washington. The Respondents agreed to pay a fine of $20,000. The Respondents waived their right to a hearing on this matter.
StormX Inc. – S-18-2422-21-SC01 - Statement Of Charges
On August 2, 2022, the Securities Division entered a Statement of Charges (order no.S-18-2422-21-SC01) against StormX, Inc. (“StormX, Inc.”), the Seattle-based issuer of the cryptocurrency Storm Tokens, and its subsidiary StormX Global SEZC f/k/a CakeCodes (“CakeCodes”), (collectively, “StormX”). The Statement of Charges alleges that StormX sold more than $32 million worth of its Storm Tokens in a crowdsale in late 2017. The Statement of Charges further alleges that the Storm Tokens are unregistered securities under the Washington State Securities Act (the “Act”), and, therefore, that StormX violated the Act’s securities registration provision. The Statement of Charges also alleges that StormX violated the Act’s anti-fraud provision by failing to disclose material facts about the Storm Tokens to prospective purchasers. The Statement also gives notice of the Division’s intent to order StormX, Inc. and CakeCodes to cease and desist from violating the Act, to impose a $50,000 fine against StormX, Inc., and a $50,000 fine against CakeCodes, and to charge $10,000 of its investigative costs to StormX. StormX, Inc. and CakeCodes may each request an administrative hearing on the Statement of Charges.
Inkism International Co., LLC d.b.a. Yi Fang Taiwan Fruit Tea - S-21-3087-21-CO03 - Consent Order
On July 13, 2022, the Securities Division entered into a Consent Order with Inkism International Co., LLC d.b.a. Yi Fang Taiwan Fruit Tea (“Respondent”). The Securities Division alleged that the Respondent misrepresented and/or failed to disclose material facts when it did not correctly identify the number of stores required to be disclosed in the franchise disclosure document that it filed with its franchise registration application. The Respondent agreed and was ordered to cease and desist from violations of RCW 19.100.170, the “Violations” sections of the Franchise Investment Protection Act. The Respondent agreed to pay investigative costs of $7,200 and waived its right to a hearing and judicial review of the matter.
Inkism International Co., LLC d.b.a. Yi Fang Taiwan Fruit Tea - S-21-3087-21-CO01 - Consent Order
On July 13, 2022, the Securities Division entered into a Consent Order with Inkism International Co., LLC d.b.a. Yi Fang Taiwan Fruit Tea (“Respondent”). The Securities Division alleged that the Respondent misrepresented and/or failed to disclose material facts when it did not disclose the necessity for its subfranchisors to register offers of franchises in Washington. The Respondent agreed and was ordered to cease and desist from violations of RCW 19.100.170, the “violations” sections of the Franchise Investment Protection Act. The Respondent agreed to pay investigative costs of $7,500 and waived its right to a hearing and judicial review of the matter.
VBit Technologies Inc – S-20-3010-21-CO01 - Consent Order
On July 12, 2022, the Securities Division (“the Division”) entered a Consent Order with Respondent VBit Technologies Inc. (“VBit”). In the Consent Order, the Division alleged that VBit violated the registration provisions of the Securities Act of Washington by selling Bitcoin mining packages, which included both specialized Bitcoin mining hardware and a contract for VBit to place and maintain the hardware, and promoting the packages as offering a passive return to investors primarily through VBit’s efforts. Without admitting or denying the Division’s allegations, VBit agreed to cease and desist from violating the Securities Act of Washington, and to issue refunds to each Washington resident who purchased a Bitcoin mining package. VBit also agreed to pay a fine of $10,000 and investigative costs of $5,000, with payment to be deferred until after completion of the refund process to Washington residents.
American Alternative Investments, LLC; Rob Whitlow - S-19-2672-21-CO03 - Consent Order
On July 11, the Securities Division entered into a Consent Order with Robyn D. Whitlow (“Whitlow”) and American Alternative Investments, LLC (“AAI) (collectively, “Respondents”). The Securities Division previously entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Impose Fines, and Charge Costs against Whitlow, AAI, and others on September 28, 2021.
The Securities Division alleges in the Consent Order that Respondents offered and sold unregistered securities in Washington using a nationwide network of unregistered sales agents, including bad actors. The securities offered and sold by Respondent AAI included those offered by 1 Global Capital, LLC and entities affiliated with Resolute Capital Partners, Ltd., LLC. Respondents were not registered as broker-dealers or securities salespersons, and Respondents failed to ensure their agents were registered as they made offers and sales of these securities in this state. The Consent Order further alleges that Respondents made false or misleading statements or did not provide material information necessary to make the offer and sale of these securities not misleading over the course of these solicitations. Without admitting or denying the Securities Division’s allegations, Respondents agreed to cease and desist from violations of RCW 21.20.040, the securities salesperson and broker-dealer registration section of the Securities Act of Washington. Respondent also agreed to cease and desist from violations of RCW 21.20.010, the anti-fraud section of the Securities Act of Washington. In light of the financial disclosures as part of Respondent Whitlow’s bankruptcy, the Securities Division determined to waive the collection of $50,000.00 in fines and $16,868.00 in costs. Respondents waived their rights to a hearing and judicial review of the matter.
Jason Allen Greig, a.k.a. Jay Greig, a.k.a. J. Greig, The Greig Companies, Inc. and Datassure Corporation - S-20-2899-22-SC01 - Statement of Charges
On July 8, 2022, 2022, the Securities Division entered a Statement of Charges against Respondents Jason Allen Greig, a.k.a. Jay Greig, a.k.a. J. Greig (“Greig”) of Ferndale, Washingon, The Greig Companies, Inc. and Datassure Corporation (“Respondents”). The Securities Division alleged that Greig and The Greig Companies offered and sold unregistered securities. The Securities Division alleged that the Respondents misrepresented and/or failed to disclose material facts in the offer of securities. The Securities Division alleged that Greig acted as an unregistered broker or salesperson in the offer of a security. The Securities Division intends to order Jason Allen Greig, a.k.a. Jay Greig, a.k.a. J. Greig, The Greig Companies, Inc. and Datassure Corporation to cease and desist from violations of anti-fraud and registration provisions of the Securities Act, to pay fines and the costs of the investigation. The Respondents each have an opportunity for hearing in this matter.
A Final Order was entered regarding this matter on September 29, 2022.
Plutus Enterprises LLC d/b/a OPM Wealth, Floyd Scott Agee, Jr., Stefan Dessalines, Jeremy Miner - S-21-3186-22-SC01 - Statement of Charges
On June 29, 2022, 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 Plutus Enterprises LLC d/b/a OPM Wealth, Floyd Scott Agee, Jr., Stefan Dessalines, and Jeremy Miner (collectively the “Respondents”). OPM Wealth was an internet-based company that sold an investment opportunity called The Plutus Plan. Between February of 2020 and September of 2021, at least 3 Washington residents invested approximately $97,000 in The Plutus Plan. The Securities Division alleged that the Respondents sold unregistered securities and that Floyd Scott Agee, Jr., Stefan Dessalines, and Jeremy Miner acted as unregistered securities salespersons. In offering and selling securities, the Division alleged that the Respondents failed to disclose material information, including information about the health or solvency of the company, the risks surrounding investing, the professional background and performance history of the company’s directors, and a reasonable basis for specific income projections. The Securities Division gave notice of its intent to issue an order to Respondents to permanently cease and desist from violating the Securities Act of Washington, to collect fines, and to charge costs. The Respondents have a right to request a hearing on the Statement of Charges.
A Final Order as to Floyd Scott Agee, Jr was entered on April 19, 2023.
A Consent Order as to Stefan Dessalines was entered on May 17, 2023.
A Consent Order as to Jeremy Miner was entered on February 22, 2023.
Northlake Capital & Development LLC; 183rd Shoreline Apartments, LLC; James W. Thorpe; Seth T. Heck; Shu-Mei Wang - S-20-2995-22-SC01 - Statement of Charges
On June 1, 2022, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Impose Fines, and Charge Costs against Northlake Capital & Development LLC; 183rd Shoreline Apartments, LLC; James W. Thorpe; Seth T. Heck; and Shu-Mei Wang. Respondents did business in Seattle, Washington. During 2018, the Respondents offered and sold at least $1.1 million worth of investments in 183rd Shoreline Apartments, LLC to at least five investors. In addition, between 2018 and 2020, Respondents offered and sold a total of more than $15 million worth of real estate promissory note investments to at least 28 investors. The Respondents offered and sold the investments without disclosing material risks of the investments, including the failure to secure the investments; the commingling of investor funds; the failure of prior real estate development projects; and the prior bankruptcy of James W. Thorpe. The Securities Division ordered the Respondents to cease and desist from violating the Securities Act of Washington. The Securities Division gave notice of its intent to collect fines and charge costs. The Respondents each have the right to request a hearing on the Statement of Charges.
A Consent Order as to Shu-Mei Wang was entered on December 5, 2022.
A Consent Order was entered regarding this matter on December 6, 2022.
Minear, Gregory - S-19-2672-22-CO04 - Consent Order
On May 26, 2022, the Securities Division entered into a Consent Order (“Order”) with Gregory C. Minear (“Respondent”). The Securities Division previously entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Impose Fines, and Charge Costs against Gregory C. Minear and others on September 28, 2021. The Securities Division alleged in the Consent Order that Respondent was an unregistered sales agent who sold Resolute Capital Partners-affiliated offerings to Washington investors. Respondent introduced the offerings to Washington investors, gathered information about their financial objectives and investment background, discussed the characteristics of the offerings with them, and, in one instance, filled out and submitted their investment paperwork for them. Additionally, Respondent failed to disclose to these investors his commission for successfully soliciting them to invest in these offerings. Without admitting or denying the Securities Division’s allegations, Respondent agreed to cease and desist from violations of RCW 21.20.040, the securities salesperson and broker-dealer registration section of the Securities Act of Washington. Respondent also agreed to cease and desist from violations of RCW 21.20.010, the anti-fraud section of the Securities Act of Washington. Respondent agreed to pay investigative costs of $875 in four installments. Respondent waived his right to a hearing and judicial review of the matter.
Mobile Workforce, Inc. and David Weir - S-20-2837-22-FO01 - Final Order
On May 24, 2022, the Director of the State of Washington Department of Financial Institutions entered a Final Order against Mobile Workforce, Inc. and David Weir (Respondents). Mobile Workforce Inc. is a medical supply chain management business operating out of Port Orchard, Washington. In September 2018, Respondents sold $41,000 worth of Mobile Workforce, Inc. stock to three investors, $21,000 of which was to two Washington residents. The Director concluded that Respondents violated the antifraud provision of the Securities Act of Washington when they sold the Mobile Workforce Inc. stock. The Securities Division ordered Respondents to cease and desist from further violating the antifraud provision of the Securities Act of Washington. The Securities Division ordered Respondents to each pay a fine of $10,000 and to pay investigative costs of $5,000. Respondents each has the right to petition the court for judicial review of the order.
Barnes Capital, Inc.; Daniel Barnes - S-21-3166-22-CO01 - Consent Order
On May 23, 2022, the Securities Division entered Consent Order S-21-3166-22-CO01 (“Consent Order”) with Barnes Capital, Inc. (CRD No. 140572) and Daniel Barnes (CRD No. 5143840) (collectively, “Respondents”). The Consent Order states that between January 2019 and December 2020 Respondents conducted investment advisory business in Washington without registration, in violation RCW 21.20.040(3). Respondents agreed to pay a fine and to cease and desist from future registration violations. Respondents waived their right to a hearing and judicial review of the matter.
Matthew Kelleher; Wendi DuBois - S-19-2770-21-SC01 - Statement of Charges
On May 23, 2022, the Securities Division (“the Division”) entered a Statement of Charges and Notice of Intent to Enter Order to Suspend Registrations, Impose Fines, and Charge Costs (“Statement of Charges”) against Respondents Matthew Kelleher (“Kelleher,” CRD #714170) and Wendi DuBois (“DuBois,” CRD #5240475). In the Statement of Charges, the Securities Division alleges that Kelleher and DuBois engaged in dishonest and unethical practices in the securities industry by making off-the-books payments to a colleague at UBS Financial Services Inc. with knowledge that these payments were against firm policy, and by making false attestations related to these payments on multiple compliance questionnaires.
The Statement of Charges gives notice of the Securities Division’s intent to enter an order to (a) suspend Kelleher’s registrations for a period of one year, and to suspend DuBois’ registrations for a period of one month; (b) impose fines of $10,000 as to Kelleher and $2,500 as to DuBois, and (d) to charge investigative costs of $5,000 to Kelleher and $2,500 to DuBois. The Respondents have a right to request a hearing on the Statement of Charges.
Vend Tech International, Inc. d.b.a. Naturals2Go and All4U - S-21-3169-21-CO01 - Consent Order
On April 26, 2022, the Securities Division entered into a Consent Order for Vend Tech International, Inc. In the Consent Order, the Division alleged that Respondent violated the Franchise Investment Protection Act of Washington (the Act) by offering and selling unregistered franchises in Washington. Without admitting or denying the allegations, Respondent agreed to cease and desist from violating the Act, and to pay $4,000 in investigative costs. The Respondent has waived their rights to a hearing and judicial review of this matter.
WA State Construction LLC and Cody Hopkins - S-21-3212-22-FO01 - Final Order
On April 18, 2022 the Securities Division entered a Final Order against WA State Construction LLC and Cody Hopkins (collectively, “Respondents”). The Securities Division had previously entered a Statement of Charges against the Respondents alleging that the Respondents violated the anti-fraud provisions of the Securities Act of Washington when they offered and sold promissory note investments to a Washington resident. The Final Order orders the Respondents to cease and desist from violating the Securities Act of Washington, to reimburse the Securities Division for its investigative costs, and to pay fines. The Respondents have a right to seek judicial review of the Final Order.
Voyager Digital LLC - S-21-3218-22-SC01 - Statement of Charges
On March 29, 2022, 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 Voyager Digital LLC (“Voyager”), a cryptocurrency trading company. The Securities Division alleged that, since October 2019, Voyager has offered and sold unregistered securities in the form of the Voyager Earn program, which provides a passive return to users who “stake” their cryptocurrency using a Voyager account. As of September 2021, approximately 28,000 Washington residents had staked $199 million of cryptocurrency through Voyager. The Securities Division alleged that the Respondents sold unregistered securities. The Securities Division gave notice of its intent to issue an order to Respondents to permanently cease and desist from violating the Securities Act of Washington, to collect fines, and to charge costs. The Respondents have a right to request a hearing on the Statement of Charges.
HydroDog, LLC - S-21-3251-22-CO01 - Consent Order
On March 23, 2022, the Securities Division entered into a Consent Order with HydroDog, LLC (Respondent). In the Consent Order, the Securities Division alleged that the Respondent violated the Franchise Investment Protection Act by offering and selling franchises in Washington, while not registered to do so. Without admitting or denying the Securities Division’s allegations, the Respondent agreed to cease and desist from the registration and franchise disclosure document section of the Franchise Investment Protection Act. The Respondent agreed to pay investigative costs of $2,500 and waived its right to a hearing and judicial review of the matter.
Christina M. Robbins - S-18-2479-21-CO02 - Consent Order
On March 17, 2022, the Securities Division entered into a Consent Order (“Order”) with Christina M. Robbins (“Respondent”). The Securities Division previously entered a Statement of Charges and Notice of Intent to Issue an Order to Cease and Desist, Impose Fines, and Charge Costs against Christina M. Robbins and others on August 17, 2021. The Consent Order alleges that the Respondent assisted in raising approximately $4.2 million dollars from the sale of real estate investments to approximately 24 investors, including approximately 17 Washington residents. Without admitting or denying the Securities Division’s allegations, Respondent agreed and is ordered to cease and desist from violations of RCW 21.20.040, the broker-dealer/securities salesperson registration provisions of the Securities Act. Respondent also agreed and is ordered to cease and desist from violations of RCW 21.20.010, the Unlawful offers, sales, purchases provision of the Securities Act. Respondent agreed to pay a fine of $2,000. Respondent waived her right to a hearing and judicial review of the matter.
WA State Construction LLC and Cody Hopkins - S-21-3213-21-SC01 - Statement of Charges
On March 21, 2022, 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 (“Statement of Charges”) against WA State Construction LLC and Cody Hopkins (collectively, “Respondents”) of Battle Ground, Washington. The Statement of Charges alleges that the Respondents violated the anti-fraud provisions of the Securities Act of Washington when they offered and sold more than $250,000 worth of promissory note investments to a senior citizen investor in 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 to charge costs. Respondents each have a right to request a hearing on the Statement of Charges.
A Final Order was entered regarding this matter on April 18, 2022.
Yifangwa LLC d.b.a. Yi Fang Taiwan Fruit Tea and Xiao Song, a.k.a. Elaine Song - S-21-3087-21-CO02 - Consent Order
On March 17, 2022, the Securities Division entered into a Consent Order with Yifangwa LLC d.b.a. Yi Fang Taiwan Fruit Tea and Xiao Song, a.k.a. Elaine Song (“Respondents”). The Securities Division alleged that the Respondents sold unregistered franchises to at least eight individuals to operate at least eight Yi Fang Taiwan Fruit Tea stores. Respondents failed to provide offerees with a Franchise Disclosure Document and material information such as financial statements in violation of RCW 19.100.080 and RCW 19.100.170, the Unlawful Acts and Violations sections of the Franchise Investment Protection Act. The Respondents agreed to pay investigative costs of $7,500 and waive their right to a hearing and judicial review of the matter.
AM-PM DOC, LLC (AM PM DOC LLC) and Ramsey Habeeb Saffouri – S-21-3084-21-CO01 - Consent Order
On March 17, 2022 the Securities Division entered into a consent order with Respondents AM-PM DOC, LLC, and Ramsey Habeeb Saffouri (“Respondents”). The Securities Division alleged that AM-PM DOC, LLC and Ramsey Habeeb Saffouri offered and/or sold an unregistered medical services franchise to a Washington resident. The Securities Division also alleged that the Respondents misrepresented and/or failed to disclose material facts in the offer of a franchise. The Securities Division alleged that the Respondents misrepresented and/or failed to disclose material facts in the offer and sale of a franchise. The Respondents agreed and were ordered to cease and desist from violations of RCW 19.100.020 and RCW 19.100.170, the registration and “violations” sections of the Franchise Investment Protection Act. The Respondent agreed to pay investigative costs of $7,000 and waived their right to a hearing and judicial review of the matter.
Vita Intellectus Institutional, Inc. - S-19-2806-21-SC01 - Statement of Charges
On March 13, 2022, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Impose a Fine, and to Charge Costs (“Statement of Charges”) against Moghis Uddin Mohammad (CRD # 4912020) (“Uddin”), Joshua Michael Label (CRD # 5032599) (“Label”), Vita Intellectus, LLC (CRD # 159164) (“Vita”), Bryton Shaun Stephens (CRD # 5957183) (“Stephens”), and Vita Intellectus Institutional, LLC (CRD # 306427) (“VI Institutional”) (collectively, “Respondents”). The Securities Division alleges that Respondents Uddin, Label, and Vita violated the Securities Act of Washington, including by breaching their fiduciary duties to their clients, engaging in acts, practices, or courses of business which operate as a fraud or deceit upon any person, and making untrue or misleading statements or omissions when they traded their clients’ assets using high risk and unsuitable trading strategies, covered up that they were or became banned from using two different investment management platforms, and deflected the blame for client losses away from their trading strategies.
The Securities Division also alleges that, in the aftermath of this scheme, Respondents Label, Stephens, and VI Institutional did the same by failing to disclose the investment management platform ban to clients and holding themselves out as investment advisers or investment adviser representatives to the public through their website and other communication channels, including by stating that they were state-registered investment advisers. Further, the Securities Division alleges that Respondents Label, Stephens, and VI Institutional transacted business in this state as an investment adviser or investment adviser representative without registration.
Respondents managed the assets of a mostly-Washington state-based clientele concentrated in King and Snohomish counties. Their clients ranged from early career investors to those in or near retirement. Respondents Uddin, Label, and Vita caused millions of dollars in client losses through risky, high frequency trading strategies and holding their clients assets in leveraged ETFs for extended periods of time. Respondents, Uddin, Label, and Vita did so regardless of their clients’ risk profiles, and used this strategy across client assets without disclosing the risks to their clients and while telling clients that their individual investment strategies were tailored to their specific needs. As clients began to complain about the losses in their accounts, Respondents Uddin, Label, and Vita blamed political or macroeconomic events for these losses despite the fact that their clients’ losses were at a multiple to that the market experienced as a whole. During this period, Respondents were also banned from using two investment platforms on which they managed client assets, did not disclose these bans, and communicated their subsequent actions as planned business decisions rather than as a result of these bans.
The Securities Division intends to order Respondents to cease and desist from violating the Securities Act of Washington, that Respondents Uddin, Label, and Vita to pay a fine of $720,000.00, and that Respondents Stephens and VI Institutional to pay a fine of $20,000.00. Additionally, the Securities Division intends to order Respondents Uddin, Label, and Vita to pay investigative costs of at least $109,250.00 and Respondents Stephens and VI Institutional to pay investigative costs of at least $500.00. The Securities Division also intends to deny any future investment adviser, broker-dealer, investment adviser representative, or securities salesperson applications for registration filed by Respondents Label and/or Uddin.
Respondents have a right to request a hearing on the Statement of Charges.
Mind Generations (John C. Brandy) - S-19-2805-22-FO01 - Final Order
On March 11, 2022 the Securities Division issued a Final Order against Placerville, California resident John C. Brandy (“Brandy”) (CRD no. 4887385). The Securities Division previously issued Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Impose a Fine, to Charge Costs, and to Deny Registrations (the “Statement of Charges”) (order no. S-19-2805-21-SC01) against Brandy. The Statement of Charges alleged that, while he resided in Mill Creek, Washington, Brandy provided investment advisory services to multiple Washington residents without registration as an investment adviser or investment adviser representative with the Securities Division. The Statement of Charges also alleged that Brandy unethically promoted these services by failing to remove a certain designation from his website once he no longer held it. The Statement of Charges gave notice of the Securities Division’s intent to order Brandy to cease and desist from violating the Securities Act of Washington, to pay a $5,000 fine, to charge $1,000 of its costs, and to deny any investment adviser and investment adviser representative registrations that Brandy may seek in the future. Brandy could have requested an administrative hearing on the Statement of Charges, but he failed to do so. The Final Order orders Brandy to cease and desist from violating the Securities Act of Washington, to pay a $5,000 fine, to pay $1,000 of investigative costs, and that any application for registration as an investment adviser or investment adviser representative that Brandy may make in the future shall be denied. Brandy may apply for judicial review of the Final Order.
Stocktradefxt - S-21-3185-21-FO01 - Final Order
On March 11, 2022, the Securities Division issued a Final Order to Cease and Desist, to Impose Fines, and to Charge Costs (Final Order) against Respondent Stocktradefxt.
The Final Order finds that Stocktradefxt offered and/or sold securities in Washington by operating a cryptocurrency trading platform, while not registered to do so. The Final Order further alleges that Stocktradefxt made false and misleading claims about its cryptocurrency trading platform and offerings in addition to making untrue statements of material fact, defrauding a Washington resident who lost more than $17,000.
In the Final Order, the Securities Division orders Stocktradefxt cease and desist from further violations of the Securities Act of Washington, in addition to paying a fine of $20,000 and investigative costs of $1,250. Stocktradefxt has a right to request judicial review of the Final Order.
MVP Group Inc., SBL LLC, and Jaime Radcliff - S-21-3131-21-CO01 - Consent Order
On March 1, 2022, the Securities Division entered into a Consent Order with MVP Group Inc., SBL LLC, and Jaime Radcliff (“Respondents”). The Consent Order alleged that the Respondents raised more than $300,000 through the sale of investments to investors in Washington and other states. In settling the matter, the Respondents neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act. The Respondents further agreed to pay a fine of $20,000 and reimburse the Securities Division $9,000 for its costs of investigation. The Respondents waived their right to a hearing and to judicial review of the matter.
BlockFi Lending LLC - S-21-3170-22-CO01 - Consent Order
On February 17, 2022, the Securities Division entered a Consent Order against BlockFi Lending LLC (“BlockFi”). The Consent Order resolves the Statement of Charges entered on September 23, 2021 as to all entities. From approximately March 2019 through February 14, 2022, BlockFi offered and sold interest-earning cryptocurrency deposit accounts, called BlockFi Interest Accounts (“BIAs”), to the public. As of December 31, 2021, BlockFi sold BIAs to over 15,710 Washington residents, whose total BIA holdings exceeded $391,968,000 in value. The BIAs were not registered as securities in Washington nor otherwise exempt from registration. In selling BIAs to the public, BlockFi made a materially misleading statement by stating that loans to institutional investors were “typically” overcollateralized, when in fact they were not. These institutional loans were funded by BIA client assets and were a large source of the interest used to pay BIA clients. In the Consent Order, the Division alleged that BlockFi’s offer and sale of the BIAs, along with the misleading statement, violated the Securities Act of Washington. By entering into the Consent Order, BlockFi neither admitted nor denied the Division’s allegations contained in the Consent Order. BlockFi further agreed to cease and desist from violating the Securities Act, and to pay an administrative fine of $932,896.22 and investigative costs of $10,500. BlockFi also waived its right to an administrative hearing on and judicial review of this matter.
PrimeFX Pro – S-21-3190-21-FO01 - Final Order
On February 4, 2022, the Securities Division issued a Final Order to Cease and Desist, to Impose Fines, and to Charge Costs (Final Order) against Respondent PrimeFX Pro.
The Final Order finds that PrimeFX Pro offered and/or sold securities in Washington by operating a cryptocurrency trading platform, while not registered to do so. The Final Order further finds that PrimeFX Pro made false and misleading claims about its cryptocurrency trading platform and offerings in addition to making untrue statements of material fact, defrauding a Washington resident who lost more than $7,500.
In the Final Order, the Securities Division orders PrimeFX Pro cease and desist from further violations of the Securities Act of Washington, in addition to paying a fine of $20,000 and investigative costs of $2,500. PrimeFX Pro has a right to request judicial review of the Final Order.
Edson Fessenden Gallaudet III and 2014 Yale Partners, LLC - S-21-3094-22-CO01 - Consent Order
On February 4, 2022, the Securities Division entered into a Consent Order with Edson Fessenden Gallaudet III (“Gallaudet”) and 2014 Yale Partners, LLC (“Yale Partners”). Gallaudet was a Seattle real estate developer who did business under the name Build Urban LLC (“Build Urban”). In 2018, Gallaudet sold an $820,000 investment in Yale Partners to a Colorado investor that Gallaudet had known since college. The invested funds were supposed to be used to finance the construction of six townhouses in Seattle. The townhouses would be owned by Yale Partners. Instead, Gallaudet spent the funds within 90 days to pay for Build Urban’s business expenses, including payments to other Build Urban real estate development projects. The land for the Yale Partners project was not even purchased until more than a year after the investment was made. Gallaudet failed to disclose to the investor that Gallaudet would use the invested funds for other projects. The Securities Division found that Gallaudet and Yale Partners each violated the anti-fraud provision of the Securities Act of Washington. Without admitting or denying any violations, Gallaudet and Yale Partners agreed to cease and desist from any violation of RCW 21.20.010, the anti-fraud provision of the Securities Act of Washington. Gallaudet agreed to pay a fine of $5,000 and Gallaudet and Yale Partners each waived their right to a hearing and to judicial review of this matter.
Osage Pacific Advisors, Inc. (CRD No. 284257) - S-21-3156-22-SC01 - Statement of Charges
On February 4th, 2022, the Securities Division entered Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, to Impose a Fine, and to Charge Costs S-21-3156-22-SC01 (“Statement of Charges”) against Osage Pacific Advisors, Inc. (“Respondent”, CRD No. 284257). In the Statement of Charges, the Securities Division alleges Respondent, a California-registered investment adviser, failed to comply with Washington registration requirements pursuant RCW 21.20.040 of the Securities Act. Specifically, the Securities Division alleges that for a period of approximately five years Respondent employed a Washington-based investment adviser representative who was not registered in Washington or exempt from registration; that Respondent held out the representative on a website as a “401k Investment Advisor” located in Washington; and that the representative performed investment advisory services for compensation on behalf of Respondent. The Statement of Charges gives notice of the Securities Division’s intent to order Respondent to cease and desist from violations of RCW 21.20.040; to impose an administrative fine of $15,000; and to charge investigative costs of at least $1,000. Respondent has a right to request a hearing on the Statement of Charges.
A Consent Order was entered regarding this matter on August 9, 2022.
Stock Management LLC d/b/a Ben Heeb & Associates; Ben Heeb; Susan Williams - S-21-3108-21-CO01 - Consent Order
On January 25, 2022, the Securities Division entered into a Consent Order with Respondents Stock Management LLC d/b/a Ben Heeb & Associates, Ben Heeb, and Susan Williams (collectively, “the Respondents.”) In the Consent Order, the Securities Division alleged that the Respondents had experienced two cybersecurity incidents in November 2020, and had failed to establish, maintain, and enforce written physical and cybersecurity policies and procedures reasonably designed to ensure the security and integrity of their physical and electronic records. The Securities Division further alleged that Susan Williams had accessed at least one client account using the client's own unique identifying information (such as username and password), and that she was aware of Washington regulations which prohibited this practice.
Without admitting or denying the Securities Division’s findings of fact or conclusions of law, the Respondents agreed to (a) develop written cybersecurity policies and procedures to address hacking incidents; (b) to pay a fine of $10,000; and (c) to pay investigative costs of $5,000. Additionally, Susan Williams agreed to a 30-day suspension of her registration as an investment adviser representative, beginning on January 14, 2022. The Respondents waived their right to a hearing and judicial review of this matter.
Avalon Investment & Securities Group, Inc. (CRD no. 6281) – S-20-3064-21-FO01 - Final Order
On January 1, 2022 the Securities Division entered a Final Order against Muscle Shoals, Alabama-based Avalon Investment and Securities Group, Inc. (“Avalon”). Avalon has been registered as a broker-dealer with the Division since 2011. The Division had entered a Statement of Charges and Notice of Intent to Revoke Registration and to Deny Future Registrations (the “Statement of Charges”) against Avalon in September 2021. The Statement of Charges alleged that the Financial Industry Regulatory Authority (“FINRA”) suspended Avalon after the firm failed to file a certain statement of income report, and that FINRA expelled Avalon when it failed to request the termination of its suspension or a hearing in the period allowed by FINRA rules. The Statement of Charges further alleged that FINRA’s expulsion of Avalon justifies the revocation of Avalon’s broker-dealer registration and the denial of any broker-dealer or investment adviser registration that Avalon may seek in the future. The Statement of Charges advised Avalon that it had twenty days from the date on which the Statement of Charges was served to submit a request for an administrative hearing on the Statement of Charges. Avalon did not request such a hearing. The Final Order revokes Avalon’s broker-dealer registration and orders that any application for registration as a broker-dealer or investment adviser that Avalon may make in the future shall be denied. Avalon may request judicial review of the Final Order.
Stocktradefxt - S-21-3185-21-SC01 - Statement of Charges
On January 1, 2021, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, in Impose a Fine, and to Charge Costs (“Statement of Charges”) against Stocktradefxt (“Respondent”). The Statement of Charges alleges that Respondent offered and/or sold securities in Washington by operating a cryptocurrency trading platform, while not registered to do so. The Statement of Charges further alleges that Respondent made false and misleading claims about its cryptocurrency trading platform and offerings in addition to making untrue statements of material fact, defrauding a Washington resident who lost more than $17,000. The Securities Division intends to order the Respondent to cease and desist from violating the Securities Act of Washington and gives notice of its intent to impose a fine and to charge costs. The Respondent has a right to request a hearing on the Statement of Charges.
A Final Order was entered regarding this matter on March 11, 2022.
PrimeFX Pro – S-21-3190-21-SC01 - Statement of Charges
On January 1, 2021, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, in Impose a Fine, and to Charge Costs (“Statement of Charges”) against PrimeFX Pro (“Respondent”). The Statement of Charges alleges that Respondent offered and/or sold securities in Washington by operating a cryptocurrency trading platform, while not registered to do so. The Statement of Charges further alleges that Respondent made false and misleading claims about its cryptocurrency trading platform and offerings in addition to making untrue statements of material fact, defrauding a Washington resident who lost more than $7,500. The Securities Division intends to order the Respondent to cease and desist from violating the Securities Act of Washington and gives notice of its intent to impose a fine and to charge costs. The Respondent has a right to request a hearing on the Statement of Charges.
A Final Order was entered regarding this matter on February 4, 2022.
Gary Len Wells - S-20-2852-21-CO01 - Consent Order
On January 1st, 2022, the Securities Division entered Consent Order S-20-2852-21-CO01 (“Consent Order”) with Gary Len Wells (CRD 1142058, “Respondent”) resolving Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, Deny Applications, Deny Future Registration, Impose a Fine, and Charge Costs S-20-2852-20-SC01 (“Statement of Charges”). After the Statement of Charges was entered, Respondent withdrew pending registration applications. In the Consent Order, Respondent agreed to cease and desist from violating the Securities Act of Washington and also agreed that any broker-dealer, securities salesperson, investment adviser, or investment adviser representative registration applications that Respondent may file in the future will be denied. Additionally, Respondent agreed to a fine of $100,000, which, due to Respondent’s financial condition, is suspended contingent on future compliance with the Consent Order. Respondent waived his right to a hearing and judicial review of the matter.