SEC acts against 15 unregistered brokers

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April 10, 2019
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SEC acts against 15 unregistered brokers

SEC acts against 15 unregistered brokers | Integrated Compliance Suite

SEC acts against 15 unregistered brokers | Integrated Compliance Suite

The Securities and Exchange Commission (SEC) has charged 15 individuals In connection with Intertech Solutions, Inc.’s fraudulent and unregistered securities offerings. The group has been charged with acting as unregistered brokers and/or aiding-and-abetting activities connected to the Nevada project finance and mining operations management company’s financial offerings.

Why did they do it?

For the exorbitant commissions, of course. Why else?

According to the SEC’s complaints, Alexander Bevil, Richard Bohnsack, Daniel Broyles, Charles Davis, Michael Duke, Joel Duncan, Martin Lewis, Mark Parman, William Roth, Paula Saccomanno, Kenneth Shelton, Billy Ray Statham, Jr., Glenn Story, Dennis Swerdlen, and Harold Wasserman were hired by Intertech Solutions to cold call or facilitate the cold call solicitation of hundreds of prospective investors. From at least February 2014 through December 2015, they are alleged to have raised over $7 million from retail investors in the US and Canada.

Each solicitor received commissions ranging from 35 percent to 50 percent of the funds provided by each investor. None of the defendants disclosed their commission rates to investors. Rather, they distributed private placement memoranda indicating that only 10 percent of investor proceeds would be used to pay them as commissions.

Working from lead lists, the defendants reportedly initiated contact and followed up with mailed or emailed offering documents and directed prospects to visit Intertech’s website.

Intertech and its principals William Scott Marshall and David Naylor previously had been charged by the SEC with unregistered, fraudulent offerings in August 2018. Representing itself to be a project finance and management company for mining operations, Intertech was a Nevada corporation formed in April 2010, with its principal business location in Scottsdale, AZ. The company entered into an agreement with the mineral rights holder of mining claims in La Paz County, AZ and offered to obtain the necessary funding for commercial gold production reported to be in the claims by selling “gold contracts” to investors in exchange for a percentage interest in the gross proceeds of any gold obtained.

The SEC’s complaints, filed in federal district courts in Nevada, Texas, and Florida, charge the defendants with either direct or indirect violations of the broker-dealer registration provisions of Section 15(a)(1) of the Securities Exchange Act of 1934. Twelve of the defendants are also charged with the securities registration and antifraud provisions of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and one defendant is also charged with violating the securities registration provision of Section 5(a) and (c) of the Securities Act.

Eleven of the 15 defendants have agreed to the entry of final judgments. They will be prohibited from future solicitations of securities sales or purchases, barred from involvement in penny stocks, and ordered to pay disgorgement of ill-gotten gains and civil monetary penalties.

Litigations will proceed against the non-settling defendants Richard Bohnsack, Daniel Broyles, Glenn Story, and Harold Wasserman.

The Financial Industry Regulatory Authority had initially referred the matter to the SEC which, in this instance also worked with a host of state, federal, and foreign authorities, including the British Columbia Securities Commission and the Cayman Islands Monetary Authority.Litigations will proceed against the non-settling defendants Richard Bohnsack, Daniel Broyles, Glenn Story, and Harold Wasserman.

Where were compliance and oversight?

Nowhere to be found. Repeating the obvious, yet again: One cannot stop investors from investing in opportunities that are much too good to be true. But one can help firms interested in compliance remain compliant. That’s where Patrina can help. We’ve built our business based on helping organizations keep track of “bad apples,” and stay on the “straight and narrow” efficiently and cost-effectively. So, let’s talk. Call 212-233-1155 to ask about Patrina’s cost-effective, designated third-party services, our comprehensive 8-module compliance solution, and compliant data capture & file storage, and records archiving specifically designed for the financial services community. Be smart. Be covered.