2013 Administrative Orders
2013 | 2012 | 2011 | 2010 | 2009 | 2008 | 2007 | 2006 | 2005 | 2004 | 2003 | 2002 and Earlier
Orders are in PDF format: Orders linked from this page are in PDF format. To open a PDF file, you will need Adobe Acrobat Reader to view it. If you don't already have Acrobat Reader installed on your computer, you may download it for free from Adobe.
Mitchell A. Steitz - S-10-451-12-FO01 - Final Order
On May 9, 2012, the Securities Division entered a Final Order against Mitchell A. Steitz (“Steitz”). The Securities Division previously entered a Statement of Charges against Steitz on July 26, 2011. The Statement of Charges alleged that Steitz, a former securities salesperson with MML Investor Services (“MML”) and Northwestern Mutual Investment Services (“NMIS”), engaged in dishonest and unethical practices with respect to one of his Washington resident customers while he was employed with NMIS. Steitz represented to his customer that his customer could invest with Steitz in order to gain access to a special investment program only available to NMIS employees. NMIS maintained no such investment program. Steitz accepted two investments for a total of $12,500 from his customer and never paid his customer back. The Statement of Charges also alleged that Steitz violated the registration and anti-fraud provisions of the Securities Act. The Securities Division orders Steitz to cease and desist from violating the Securities Act of Washington, denies any future securities registration applications made by Steitz, and orders Steitz to pay a fine of $10,000 and investigative costs of $900. Steitz has the right to request judicial review of this matter.
Blue Chip Focus Fund, LP; Opportunities Fund, LP; Biotechnology Fund, LP; Sasquatch US Strategy Fund, LP f/k/a US Blue Chip Model, LP; Sasquatch Capital, LLC; Lyman Bruhn - S-11-0662-13-FO01 – Final Order
On April 19, 2013, the Securities Division entered a Final Order against Blue Chip Focus Fund, LP; Opportunities Fund, LP; Biotechnology Fund, LP; Sasquatch US Strategy Fund, LP f/k/a US Blue Chip Model, LP; Sasquatch Capital, LLC; and Lyman Bruhn (“Bruhn”) (collectively, “Respondents”). The Securities Division had previously entered a Statement of Charges against Respondents alleging that between approximately 1999 and 2004, Bruhn offered and sold at least $349,000 worth of limited partnership interests in the Respondent entities to at least seven Washington residents. The Statement of Charges further alleges that, in doing so, Respondents committed multiple violations of the Washington Securities Act (the “Act”). The Final Order orders the Respondents to cease and desist from violating the Act, imposes fines, and orders the Respondents to reimburse the Securities Division its investigative costs. The Respondents have a right to request judicial review of the Final Order.
The Institute For Financial Learning Group of Companies, Inc.; Strategic Metals, Inc., Merendon Mining Corporation, Ltd., Milowe A. Brost; Kristina J. Bass f/k/a Kristina J. Katayama and a/k/a Kristina J. Katayama Bass; Ronald R. Case; Warren L. Bosma; Ward K. Capstick - S-04-124-08-CO04 - Consent Order
On April 19, 2013, the Securities Division entered into a consent order with Kristina J. Bass f/k/a Kristina J. Katayama and a/k/a Kristina J. Katayama Bass. The Securities Division had previously issued a Statement of Charges, S-04-124-08-SC01, against Mrs. Bass f/k/a Kristina J. Katayama, The Institute For Financial Learning Group of Companies, Inc., Strategic Metals, Inc., Merendon Mining Corporation, Ltd., Milowe A. Brost, and others. The Securities Division had alleged that Respondent Kristina Bass violated the state securities registration, broker-dealer/salesperson registration and anti-fraud laws in connection with the offer and sale of promissory notes. Without admitting or denying the Securities Division’s allegations, Kristina Bass agreed to cease and desist from violating the securities registration, broker-dealer/salesperson registration and anti-fraud laws of the state Securities Act. Kristina Bass waived her right to a hearing and judicial review of the matter.
PetroGates, Inc.; Davis Gates Smith – S-11-0755-13-FO01 – Final Order
On April 9, 2013, the Securities Division entered a Final Order against PetroGates, Inc. and Davis Gates Smith (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 investments in oil and gas ventures 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 its investigative costs, and to pay a fine. The Respondents have a right to seek judicial review of the Final Order.
SpiritLiving Co. and Dennis Eugene Crumb – S-12-1087-13-CO01 – Consent Order
On April 4, 2013, the Securities Division entered into a Consent Order with Respondents, SpiritLiving Co. and Dennis Eugene Crumb. The Consent Order alleges that Respondents were in the business of offering and selling home and garden products through the Internet. The Consent Order alleges that Respondents each offered and sold $25,000 worth of stock in SpiritLiving Co. to a Washington investor in September 2008 without disclosing material information about the investment, including a prior default on promissory notes that were issued to a Colorado corporation. Without admitting or denying the Securities Division’s allegations, Respondents agreed to cease and desist from violating the anti-fraud provision of the Securities Act of Washington. Dennis Eugene Crumb also paid a fine of $2,500 and paid investigative costs of $1,000. Respondents each waived their right to a hearing and judicial review of the matter.
Gregory Pinneo and Yale Avenue Partners, LLC - S-10-047-12-CO01 - Consent Order
On April 4, 2013, the Securities Division entered into a Consent Order as to Gregory Pinneo (“Pinneo”) and Yale Avenue Partners, LLC ("Yale Avenue Partners") (collectively “Respondents”). The Consent Order alleges that from approximately December 2005 through October 2008, Pinneo raised approximately $4.5 million through the offer and sale of limited liability company interests in East Edgar Partners, LLC; Franklin Avenue Partners, LLC; Yale Avenue Partners; and 2344-2345 Franklin Twins, LLC to approximately 76 investors, the majority of whom were Washington residents. The Consent Order further alleges that Pinneo violated the securities registration and anti-fraud provisions of the Securities Act of Washington. The Consent Order also alleges that Yale Avenue Partners violated the securities registration provisions of the Securities Act of Washington. Without admitting or denying the Securities Division’s allegations, Respondents each agreed to cease and desist from violating the Securities Act of Washington. Pinneo paid a fine of $3,000 and paid investigative costs of $3,000. Respondents each waived their right to a hearing and judicial review of the matter.
Mark Nuovo – S-12-1035-13-SC01 – Statement of Charges
On March 29, 2013, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Deny Future Registrations and to Impose Fines and Charge Costs (“Statement of Charges”) against Mark Nuovo (“Nuovo”). The Securities Division alleged that Nuovo effected transactions in securities that were not offered or reviewed by Euro and off the regular books and records of his broker-dealer firm, failed to inform his broker-dealer firm of his outside business activities in violation and falsely filed Form U4s with the Washington State Securities Division. The Securities Division also alleged that Nuovo gave at least one Washington investor a profit projection without disclosing the material bases and assumptions underlying the projection. The Securities Division intends to order Nuovo to cease and desist from violating the Securities Act of Washington, deny future securities registrations applications, impose fines, and charge costs. Nuovo has the right to request a hearing on the Statement of Charges.
Cecilia Cabasco Sawyer – S-13-1154-13-SC01 – Statement of Charges
On March 29, 2013, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Deny Future Registrations, to Impose Fines, and to Charge Costs (Statement of Charges) against Respondent, Cecilia Cabasco Sawyer, aka Cecilia Cabasco Villanueva (Sawyer). The Statement of Charges alleges that Sawyer forged documents in order to claim a client’s annuity death benefit, falsely opened a bank account under the client’s name, and deposited the death benefit funds into the account. It further alleges that Sawyer forged checks on the bank account and withdrew funds for her own benefit. The Statement of Charges alleges that Sawyer misrepresented the beneficiary and the value of the death benefit to a second client, forged a variable annuity application in the second client’s name, and forged the check used to purchase the annuity. The Statement of Charges alleges that such behavior is dishonest or unethical as described by WAC 460-22B-090, and it is grounds for a fine, costs, and denial of future registration applications pursuant to RCW 21.20.110(1)(g). The Statement of Charges also alleges that Sawyer’s actions violated FINRA Rule 2010, an ethical standard, that Sawyer was convicted of a felony of moral turpitude, and that Sawyer was the subject of an order revoking her insurance producer license for violating Washington insurance laws. The Securities Division intends to deny future securities registration applications, impose fines, and charge costs. Respondent has the right to request a hearing on the Statement of Charges.
Kathleen R. Bright - S-07-169-12-CO01 - Consent Order
On March 28, 2013, the Securities Division entered into a Consent Order, S-07-169-12-CO01, with Kathleen R. Bright. The Securities Division had previously entered a Statement of Charges and Notice of Intent to Issue an Order to Cease and Desist, Impose Fines, and Recover Costs, S-07-169-11-SC01, against Radix Marine, Inc., Kathleen R. Bright, and Brad M. Goodspeed (collectively “Respondents”) on August 21, 2012. Radix Marine, Inc., located in Yakima, Washington, primarily develops, manufactures, and/or markets marine vessels. The Division alleged that the Respondents raised a total of $244,900 by selling convertible promissory notes to at least 14 investors, including at least 7 Washington residents. The Division further alleged that the Respondents offered and sold unregistered securities and violated the anti-fraud provision of the Securities Act of Washington. Kathleen R. Bright neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act and to pay investigative costs of $1,000. Kathleen R. Bright waived her right to a hearing and to judicial review of this matter.
SearchPath International, Inc.; Pathfinder Search Partners of Cleveland, Inc. d/b/a SearchPath of Cleveland Uptown - S-12-1084-12-SC01 - Statement of Charges
On March 15, 2013, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist (Statement of Charges) against SearchPath International, Inc. and Pathfinder Search Partners of Cleveland, Inc. d/b/a SearchPath of Cleveland Uptown. (collectively, Respondents). The Statement of Charges alleges that Respondents offered and sold an unregistered franchise to a Washington resident and that it failed to provide the Washington resident with a franchise disclosure document. The Statement of Charges further alleges that Respondents violated RCW 19.100.170 because, in connection with the sale of a franchise, Respondents omitted a material fact. Respondents each have a right to request a hearing on the Statement of Charges.
Strategic I, LLC; Strategic IV, LLC; SAAM Realty, LLC; Edward R. Zumwalt - S-09-020-12-SC01 - Statement of Charges
On March 14, 2013, 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 Strategic I, LLC; Strategic IV, LLC; SAAM Realty, LLC; and Edward R. Zumwalt (collectively “Respondents”). The Division alleges that from November 2006 through February 2008, Zumwalt raised a total of $518,000 by selling investments primarily to members of an investment club based in Port Orchard, Washington. The majority of investments were in the form of LLC units in Strategic I, LLC and Strategic IV, LLC. Investor funds were intended to be used to acquire and operate commercial or residential real estate properties. Although both offerings were eventually discontinued before the purchase of any properties, not all of the Strategic I, LLC investors received their principal back. Zumwalt also sold a partnership interest in his real estate brokerage business, SAAM Realty, LLC, to at least one investment club member. 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 Division ordered Respondents to cease and desist from violating the Securities Act of Washington. The 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.
Hounds Mounds, Inc. d/b/a Poop 911 - S-13-1191-13-CO01 - Consent Order
On March 13, 2013, the Securities Division entered into a consent order with Hounds Mounds, Inc. d/b/a Poop 911, of Dallas, Texas. In the consent order, the Securities Division alleged that the Respondent violated the registration and disclosure document provisions of the state Franchise Act in connection with the offer and/or sale of its pet waste removal franchise to Washington residents. Without admitting or denying the Securities Division’s allegations, Respondent agreed to cease and desist from violating the registration and disclosure document provisions of the state Franchise Act. Respondent further agreed to reimburse the Securities Division $875 for its costs of investigation. Respondent waived its right to a hearing and judicial review of the matter.
PetroGates, Inc.; Davis Gates Smith – S-11-0755-12-SC01 – Statement of Charges
On March 11, 2013, the Securities Division entered a Statement of Charges and Notice of Intent to Order to Cease and Desist, to Charge Costs, and to Impose Fines against PetroGates, Inc. and Davis Gates Smith (collectively “Respondents”). The Statement of Charges alleges that the Respondents violated the anti-fraud provisions of the Securities Act of Washington when they offered and sold investments in oil and gas ventures to a Washington resident. 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 April 9, 2013.
JFB Capital LLC; Jason F. Bond - S-12-0958-13-TO02 - Summary Order
On March 11, 2013, the Securities Division entered a Summary Order to Suspend Investment Adviser and Investment Adviser Representative Registrations and Statement of Charges and Notice of Intent to Revoke Registrations, to Impose Fines, and to Charge Costs (“the Order”) against JFB Capital LLC and Jason F. Bond. The Order alleges that JFB Capital LLC, a registered investment adviser, and Jason F. Bond, JFB Capital LLC’s investment adviser representative, have willfully violated the Securities Act of Washington and Consent Order S-12-0958-12-CO01 by failing to maintain JFB Capital LLC’s minimum financial requirement and by failing to timely notify the Securities Division of JFB Capital, LLC’s inability to meet its minimum financial requirement. The Securities Division orders the suspension of JFB Capital LLC’s investment adviser and Jason Bond’s investment adviser representative registrations, and gives notice of the Securities Division’s intent to revoke those registrations, to impose fines, and to charge costs. Respondents have the right to request a hearing on the Order.
David Patrick Thomas - S-12-0974-13-SC01 - Statement of Charges
On March 11, 2013, the Securities Division entered a Statement of Charges and Notice of Intent to Enter an Order to Cease and Desist, to Deny Future Registrations, to Impose a Fine, and to Charge Costs (“Statement of Charges”) against Respondent, David Patrick Thomas (“Thomas”). The Statement of Charges alleges that Thomas, who was formerly a registered securities salesperson in Bellingham, Washington, offered and sold more than $435,000 worth of securities to Washington investors. The Statement of Charges alleges that Thomas failed to disclose to investors that he did not have approval from his registered securities broker-dealer to offer or sell the investments and that he misrepresented or failed to disclose material information about the investments, including the risks of the investments. The Securities Division intends to order the Respondent to cease and desist from violating the Securities Act of Washington, deny future securities registration applications, impose a fine, and charge costs. Respondent has the right to request a hearing on the Statement of Charges.
SpiritLiving Co. and Dennis Eugene Crumb - S-12-1087-13-SC01 - Statement of Charges
On February 26, 2013, 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, SpiritLiving Co. and Dennis Eugene Crumb. The Statement of Charges alleges that Respondents were in the business of offering and selling home and garden products through the Internet. The Statement of Charges alleges that Respondents each offered and sold $25,000 worth of stock in SpiritLiving Co. to a Washington investor in September 2008 without disclosing material information about the investment, including a prior default on promissory notes that were issued to a Colorado corporation. The Statement of Charges gives notice of the Securities Division’s intent to enter an order to cease and desist from violating the Securities Act of Washington, to impose a fine of $2,500, and to charge investigative costs of $1,000. Respondents each have the right to request a hearing on the Statement of Charges.
A Consent Order regarding this matter was entered on April 4, 2013.
ZAGG, Inc.; ZAGG Retail, Inc. - S-12-1111-12-CO01 - Consent Order
On February 22, 2013, the Securities Division entered into a Consent Order with ZAGG, Inc. and ZAGG Retail, Inc. In the Consent Order, the Securities Division alleged that ZAGG, Inc. sold unregistered franchises in the state of Washington, and that it failed to provide franchisees with a Franchise Disclosure Document. It also alleged that ZAGG Retail, Inc. failed to disclose the presence of Washington franchisees in its franchise registration application. The Consent Order alleged that this conduct by ZAGG, Inc. and ZAGG Retail, Inc. violated the Franchise Investment Protection Act of Washington. Without admitting or denying the allegations, ZAGG, Inc. and ZAGG Retail, Inc. agreed to cease and desist from violating the Franchise Investment Protection Act. Respondents further agreed to reimburse the Securities Division $2,650 for its costs of investigation. Respondents waived their right to a hearing and judicial review of the matter.
Blue Chip Focus Fund, LP; Opportunities Fund, LP; Biotechnology Fund, LP; Sasquatch US Strategy Fund, LP f/k/a US Blue Chip Model, LP; Sasquatch Capital, LLC; Lyman Bruhn - S-11-0662-12-SC01 - Statement of Charges
On February 8, 2013, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, to Impose Fines, and to Recover Costs (the “Statement of Charges”) against Blue Chip Focus Fund, LP; Opportunities Fund, LP; Biotechnology Fund, LP; Sasquatch US Strategy Fund, LP f/k/a US Blue Chip Model, LP; Sasquatch Capital, LLC; and Lyman Bruhn (“Bruhn”) (collectively, “Respondents”). The Statement of Charges alleges that between approximately 1999 and 2004, Bruhn offered and sold at least $349,000 worth of limited partnership interests in the Respondent entities to at least seven Washington residents. The Statement of Charges further alleges that, in doing so, Respondents committed multiple violations of the Washington Securities Act (the “Act”). The Statement of Charges gives notice of the Division’s intent to order the Respondents to cease and desist from violating the Act, to impose fines, and to recover costs. The Respondents have a right to request a hearing on the Statement of Charges.
A Final Order regarding this matter was entered on April 19, 2013.
Yofast, LP; David Warren a/k/a David Apperson a/k/a Hans W. Schnauber - S-09-449-13-FO01 - Final Order
On February 8, 2013, the Securities Division entered a Final Order against Yofast, LP and David Warren, a/k/a David Apperson, a/k/a Hans W. Schnauber (“Warren”) (collectively, “Respondents”). The Securities Division had previously entered a Statement of Charges against the Respondents alleging that Respondents offered and sold limited partnership interests to at least nine Washington residents. The Statement of Charges further alleged that Respondents violated the registration of securities and anti-fraud provisions of the Washington Securities Act (the “Act”), and that Warren violated the Act’s registration of securities broker-dealers and salespersons provision. The Final Order orders the Respondents to cease and desist from violations of the Securities Act of Washington, to reimburse the Securities Division its investigative costs, and to pay a fine. The Respondents have a right to seek judicial review of the Final Order.
Joseph A. Untalan, Steven D. Jackson, Genesis Holdings Group, Inc., and Phoenix Development Group, Inc. – S-11-0826-13-FO01 – Final Order
On February 6, 2013, the Securities Division entered a Final Order against Respondents, Joseph A. Untalan (“Untalan”), Steven D. Jackson (“Jackson”), Genesis Holdings Group, Inc. (“Genesis”) and Phoenix Development Group, Inc. (“Phoenix”). The Securities Division had previously entered a Statement of Charges against Respondents on November 7, 2012. The Statement of Charges alleged that Respondents violated RCW 21.20.010, RCW 21.20.040 and RCW 21.20.140 by offering and selling approximately $130,000 worth of unregistered securities to four Washington State residents. The Securities Division additionally alleged that Respondents made material misrepresentations and omissions in connection with the offer and sale of Respondents’ securities. The Final Order orders Respondents to cease and desist from violations of the Securities act of Washington and orders Untalan and Jackson to each pay a fine and to reimburse the Securities Division its investigation costs. Respondents have the right to request judicial review of the Final Order.
Settle, Dustin Lee - S-12-1127-12-SC01 - Statement of Charges
On February 1, 2013, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Deny Future Registrations, Impose Fines, and Charge Costs. The Statement of Charges alleges that Dustin Lee Settle (Respondent) filed six Form U4 disclosure amendments with the Securities Division that falsely answered and/or failed to disclose at least five financial compromises, a federal tax lien, two felony charges, and/or a felony conviction. It alleges that, by filing an amendment to his Form U4 that contained misleading information, Settle made a false filing with the Securities Division in violation of RCW 21.20.350. The Statement of Charges alleges that Settle had an obligation under WAC 460-22B-060 to update his Form U4 within 30 days of any event that would make his Form U4 inaccurate. The Statement of Charges further alleges that Settle failed to comply with three FINRA rules and engaged in dishonest or unethical practices as defined by WAC 460-22B-090(19) and RCW 21.20.110(1)(g). The Statement of Charges also alleges that Settle was suspended by FINRA, and that Settle’s felony conviction involved moral turpitude. The Securities Division intends to order the Respondent to cease and desist from violating the Securities Act of Washington, deny future securities registrations applications, impose fines, and charge costs. Respondent has the right to request a hearing on the Statement of Charges.
James Wynstra - S-09-046-12-CO01 – Consent Order
On January 30, 2013, the Securities Division entered into a Consent Order with James Wynstra. The Securities Division had previously issued 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 James Wynstra; Rita Lahman; Homestead Northwest, Inc.; Homestead NW Development Company; Homestar Northwest LLC; Great Links Resort LLC; Pro Bay LLC; and Sumas Mountain Village, Inc. (collectively Respondents”) on March 29, 2011. The Statement of Charges alleged that Respondents offered and sold an estimated $121,000,000 in unregistered real estate investments to at least 350 investors in Washington. The investments typically were promissory notes offering 8 to 10% interest and purportedly backed by a deed of trust on real estate. The Securities Division 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 James Wynstra neither admitted nor denied the Securities Division’s allegations, but agreed to cease and desist from violating the Securities Act. The Consent Order requires Wynstra to pay investigative costs of $5,000. In addition, the Consent Order imposes a $100,000 fine against Wynstra, the payment of which is deferred until investors have been repaid in full. Wynstra waived his right to a hearing and judicial review of this matter.
Dinotech Corporation; Ruby Knighton - S-12-0906-13-FO01 - Final Order
On January 30, 2013, the Securities Division entered a Final Order against Respondents, Ruby Knighton (“Knighton”) and Dinotech Corporation (“Dinotech”). The Securities Division had previously issued a Statement of Charges against Respondents, Knighton and Dinotech, on November 7, 2012. The Statement of Charges alleged that Respondents violated RCW 21.20.010, RCW 21.20.040 and RCW 21.20.140 by offering and selling $20,000 worth of unregistered stock to a Washington investor in connection with an oil and gas scheme. The Securities Division additionally alleged that Respondents made material misrepresentations and omissions in connection with the offer and sale of Respondents’ securities. The Final Order orders Respondents to cease and desist from violations of the Securities Act of Washington and orders Respondents to pay a fine. Respondents have the right to request judicial review of the Final Order.
Rita Lahman - S-09-046-12-CO03 – Consent Order
On January 29, 2013, the Securities Division entered into a Consent Order with Rita Lahman. The Securities Division had previously issued 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 James Wynstra; Rita Lahman; Homestead Northwest, Inc.; Homestead NW Development Company; Homestar Northwest LLC; Great Links Resort LLC; Pro Bay LLC; and Sumas Mountain Village, Inc. (collectively “Respondents”) on March 29, 2011. The Statement of Charges alleged that Respondents offered and sold an estimated $121,000,000 in unregistered real estate investments to at least 350 investors in Washington. The investments typically were promissory notes offering 8 to 10% interest and purportedly backed by a deed of trust on real estate. The Securities Division 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 Rita Lahman neither admitted nor denied the Securities Division’s allegations, but agreed to cease and desist from violating the Securities Act. Lahman further agreed to pay a fine of $2,500. Lahman waived her right to a hearing and judicial review of this matter.
Petra Alluis dba Global Asset Research and Recovery - S-11-0692-12-SC01 - Statement of Charges
On January 23, 2013, 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 Petra Alluis dba Global Asset Research and Recovery (“Respondent”). The Statement of Charges alleges that Respondent offered and sold at least $25,000 in unregistered investment agreements to investors in Washington and other states. The Statement of Charges further alleges that Respondent violated the anti-fraud and registration 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 a fine and charge costs. Respondent has a right to request a hearing on the Statement of Charges.
Clarence C. Young Jr.; Cautious, LLC; West Coast Financial, LLC; Safeguard Capital, LLC; Equity Interests, LLC; and Be Well Today, LLC - S-11-0680-12-SC01 - Statement of Charges
On January 22, 2013, 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 Clarence C. Young Jr. (Young); Cautious, LLC (Cautious); West Coast Financial, LLC (West Coast); Safeguard Capital, LLC (Safeguard); Equity Interests, LLC (EI); and Be Well Today, LLC (Be Well) (collectively, Respondents). The Securities Division alleged that Young created and managed four pooled investment vehicles, Cautious, West Coast, Safeguard, and EI, through which he raised approximately $7,441,132 from investors through the sale of LLC membership interests. The Securities Division alleged that Young had control over the LLC pooled funds and invested the LLC pooled funds in larger trading programs of his choosing. The Securities Division further alleged that each trading program that Young chose was later investigated and helped shut-down by either the U.S. Securities and Exchange Commission or the U.S. Commodity Futures Trading Commission due to fraud. The Securities Division alleged that Young violated RCW 21.20.020 by engaging in acts which operated as a fraud upon those he advised when he, among other allegations, spent investor funds on his family-owned winery without ever informing investors. The Securities Division alleged that Young, Cautious, West Coast, Safeguard, and Equity violated RCW 21.20.010, the anti-fraud provision of the Securities Act of Washington. The Securities Division also alleged that Young, Cautious, West Coast, Safeguard, and Equity sold unregistered securities in violation of RCW 21.20.140. The Securities Division alleged that Young violated RCW 21.20.040 by acting as an unregistered broker-dealer and/or securities salesperson and acting as an unregistered investment adviser. The Securities Division alleged that Be Well violated RCW 21.20.040 by acting as an unregistered broker-dealer. The Statement of Charges gives notice to Respondents of the Securities Division’s intent to enter an order to cease and desist from violating the Securities Act of Washington, to impose fines, and to charge costs. Respondents have a right to request a hearing on the Statement of Charges.
David Lyn Lenihan; AllianceCapital Asset Management, LLC; Crown Preferred Capital, LLC; The UltraSharpe Fund, LP; Noah James Aulwes; and James Bernard Kayser - S-09-507-12-SCO1 - Statement of Charges
On January 11, 2013, the Securities Division entered a Statement of Charges and Notice of Intent to Enter Order to Cease and Desist, Deny Future Registrations, Impose Fines, and Charge Costs (“Statement of Charges”) against David Lyn Lenihan (“Lenihan”); AllianceCapital Asset Management, LLC (“AllianceCapital”); Crown Preferred Capital, LLC (“Crown Preferred”); The UltraSharpe Fund, LP (“UltraSharpe”); Noah James Aulwes (“Aulwes”); and James Bernard Kayser (“Kayser”) (Collectively “Respondents”). The Statement of Charges alleges that Lenihan created and managed two pooled investment vehicles, Crown Preferred and UltraSharpe, through which he raised approximately $6.8 million from investors through the sale of LLC or partnership interests. Both pooled investment vehicles purportedly involved Lenihan utilizing trading algorithms to determine when to buy and sell securities, with investors receiving a percentage of any profits from the trades. The Statement of Charges alleges that Crown Preferred, Lenihan, Aulwes, and Kayser sold unregistered securities and that they each violated RCW 21.20.010, the anti-fraud provision of the Securities Act of Washington when they sold interests in Crown Preferred. The Statement of Charges further alleges that UltraSharpe, Lenihan, and Aulwes violated RCW 21.20.010 when they sold interests in UltraSharpe. The Statement of Charges also alleges that Lenihan and AllianceCapital violated RCW 21.20.030(1) by entering into performance-based compensation arrangements with clients which did not qualify for an exemption. The Statement of Charges further alleges that Lenihan and AllianceCapital violated RCW 21.20.020, the investment adviser anti-fraud provision of the Securities Act of Washington. The Statement of Charges further alleges that Lenihan and AllianceCapital made false statements in Form ADV amendments filed with the Securities Director. 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 deny future registrations, impose fines, and charge costs. Respondents have a right to request a hearing on the Statement of Charges.
William Spencer Howard III - S-09-154-12-CO01 - Consent Order
On January 11, 2013, the Securities Division entered into a Consent Order with William Spencer Howard III. 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 the Respondents William Spencer Howard III and Raymond Francis Purdon on March 1, 2011. The Securities Division alleged that while a Washington resident was Respondent Howard’s customer at GunnAllen Financial, Inc., Respondent Howard and/or his colleague Respondent Purdon solicited the resident to invest a total of $443,504 in two stock investments. The Securities Division alleged that in offering and selling the investments, Respondent Howard and/or Respondent Purdon violated the anti-fraud provision of the Securities Act of Washington by making misrepresentations and omissions of material facts, and engaged in dishonest or unethical practices by effecting securities transactions not recorded on the regular books and records of the broker-dealer which they represented. The Securities Division further alleged that in offering and selling the investments, Respondent Howard engaged in dishonest or unethical practices by recommending an unsuitable investment, marking an order ticket as unsolicited when in fact the transaction was solicited, and by forging the resident’s signature. Respondent Howard neither admitted nor denied the allegations, but agreed to cease and desist from violating the Securities Act. Respondent Howard further agreed to not apply for future securities licenses in the state of Washington. Respondent Howard waived his right to a hearing and to judicial review of this matter.
Champion Child, Inc. d/b/a “Stretch-n-Grow,” Jill A. Manly, Robert “Bob” Manly and Caryn J. Burnier - S-11-0845-12-SC01 - Statement of Charges
On January 7, 2013, the Securities Division entered a Statement of Charges against Respondents Champion Child, Inc. doing business as Stretch-N-Grow, a Florida corporation, Jill A. and Robert “Bob” E. Manly, and Caryn J. Burnier. The Securities Division alleged that the Respondents violated the registration and anti-fraud provisions of the state Franchise Act in connection with the offer and sale of a franchise to Washington State residents. The Securities Division intends to order the Respondents to cease and desist from violating the Franchise Act.
