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Securities Administrative Orders Issued

The following orders were issued by the Division pursuant to Wis. Stat. §551.605 with respect to various professional registration and securities filing requirements under the Wisconsin Uniform Securities Law and may modify or supplement the requirements of Chapter 551. For orders relating to enforcement matters, see below.

Crowdfunding Orders

Adobe PDF Document Order Permitting Certain Advertising under Wis. Stat. §551.202(27)

Adobe PDF Document Order Regarding Periodic Reporting

Adobe PDF Document Order Regarding Commissions

Exemption Orders

Adobe PDF Document Order Designating Nationally Recognized Securities Manual

Adobe PDF Document Private Fund Adviser Exemption Order

Professional Registration Orders

Adobe PDF Document Order Requiring Compliance with New FINRA Examination Requirements

Reg A Orders

Adobe PDF Document Order Regarding Regulation A Tier 2 Notice Filing

Reg D Orders

Adobe PDF Document Reg D Delinquent Filing Order

Enforcement Orders

The following orders were issued by the Division to enforce various provisions of the Wisconsin Uniform Securities Law as found in Chapter 551. Signed copies of Petitions for Order and Orders associated with the following persons or entities are available in the PDF format.

See Links to Archives below

Russel L. Vera and Fortune Oil & Gas, Ltd – Case No. S-220109 (EX) – a Summary Order to Cease and Desist was issued against Russel L. Vera and Fortune Oil & Gas, Ltd. for the following violations:

  • Vera and Fortune Oil violated Wis. Stat. § 551.501(2) when they failed to inform the Wisconsin resident of the numerous tax liens and civil judgments filed against Vera.

Order issued May 16, 2019

 

Edward E. Matthes – Case No. S-239626 (LX) – a Summary Order to Cease and Desist and for Permanent Bar of Investment Adviser and Registered Representative Registrations was issued against Edward E. Matthes for the following violations:

  • Matthes violated Wis. Stat. § 551.412(4)(m) and Wis. Admin. Code § DFI-Sec. 4.06(2)(b)-(c) and (i) when he:
    1. Took custody of customer funds and used the funds for his own personal expenses and use;
    2. Purported to effect securities transactions which were not recorded on the books of his employing broker-dealer and failing to disclose such transactions and receive authorization prior to effecting them; and
    3. Violated FINRA Rules 2020 and 2150(a).
  • Matthes violated Wis. State. § 551.412(4)(m) and Wis. Admin. Code § DFI-Sec. 5.06(20) when he made untrue statements of a material fact and omitted to state material facts necessary in order to make the statement made, in light of the circumstances under which they were made, not misleading.
  • Matthes violated Wis. Stat. § 551.412(4)(e)(3) when he was permanently barred by FINRA from associating with any broker-dealer member in any capacity on March 22, 2019.
  • Matthes violated Wis. Stat. § 551.501(2) when, in connection in the offer and sale of a security, he made untrue statements of material fact and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading.

Order issued May 10, 2019

 

Scott A. Chanlynn and SLB Creations, Inc – Case No. S-238645 (EX) – a Consent Order to Cease and Desist and for Civil Penalties was issued against Scott A. Chanlynn and SLB Creations, Inc. for the following violations:

  • Chanlynn violated Wis. Stat. § 551.402(1) by transacting business in this state as an agent without being registered under Ch. 551 as an agent and without being exempt from registration as an agent.
  • In connection with the offer and sale of securities, SLB and Chanlynn omitted to state material facts to investors in violation of Wis. Stat. § 551.501(2).

Order issued April 22, 2019

 

Rachel Connet – Case No. S-238197 (EX) – a Consent Order to Cease and Desist and for Restitution was issued against Rachel Connet for the following violation:

  • The Respondent violated Wis. Stat. § 551.501(2), in connection with the offer and sale of securities, by making untrue statements of material fact and omitting to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading to the above investors.
  • The Respondent violated Wis. Stat. § 551.402 by transacting business in this state as an agent without being registered under Ch. 551 as an agent and without being exempt from registration as an agent.

Order issued March 22, 2019

 

Dreambuilder Investments, LLC & Peter J. Andrews – Case No. S-236252 (EX) – a Summary Order to Cease and Desist and for Civil Penalties was issued against Dreambuilder Investments, LLC and Peter J. Andrews for the following violation:

  • Dreambuilder Investments, LLC and Peter J. Andrews, in connection with the offer and sale of securities to DGC, directly and indirectly, made untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, in violation of Wis. Stat. § 551.501(2).

Order issued February 12, 2019

 

Eric N. Page, Rachel Connet, and BCP MDG, LLC – Case No. S-238197 (EX) – an Amended Summary Order to Cease and Desist and Proposed Orders for Restitution, Civil Penalties and Costs was issued against Eric N. Page, Rachel Connet, and BCP MDG, LLC for the following violations:

  • The Respondents violated Wis. Stat. § 551.501(2), in connection with the offer and sale of securities, by making untrue statements of material fact and omitting to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading to the above investors.
  • Page and Connet violated Wis. Stat. § 551.402 by transacting business in this state as agents without being registered under Ch. 551 as agents and without being exempt from registration as agents.
  • Page violated Wis. Stat. § 551.301 by offering and selling unregistered securities to persons in Wisconsin.
  • Page willfully violated Wis. Stat. § 551.508 by offering and selling unregistered securities to persons in Wisconsin and by omitting to state material facts in connection with such offer and sale, in violation of the Division’s 2009 Order issued against Page.

Order issued February 5, 2019.

 

William J. Schnepp & Epic Advisory, LLC – DFI Case No. S-239068 (EX) – a Consent Order to Cease and Desist, Permanent Bar, and Imposing Disgorgement was issued against William J. Schnepp and Epic Advisory, LLC for the following violations:

  • Epic violated Wis. Stat. § 551.403(1) by transacting business in Wisconsin as an investment adviser without being registered under Ch. 551 or exempted from registration under Wis. Stat. § 551.403(2).
  • Schnepp violated Wis. Stat. § 551.404(1) by transacting business in Wisconsin as an investment adviser representative of Epic Advisory without being registered under Ch. 551 or exempted from registration under Wis. Stat. § 551.404(2).
  • The Respondents violated Wis. Stat. § 551.501(2) when they failed to disclose to their investment advisory clients that Schnepp had been discharged from LPL Financial and that Epic Advisory and Schnepp were not registered to provide investment advice.
  • The Respondents violated Wis. Stat. § 551.501(2) when they represented to their clients and prospective clients that the Respondents were registered as an investment adviser and investment adviser representative.
  • The Respondents violated Wis. Stat. § 551.502 when they failed to disclose to their investment advisory clients that Schnepp had been discharged from LPL Financial and that Epic Advisory and Schnepp were not registered to provide investment advice.
  • The Respondents violated Wis. Stat. § 551.502 when they represented to their clients and prospective clients that the Respondents were registered as an investment adviser and investment adviser representative.

Order issued January 29, 2019.

 

LPL Financial, LLC – DFI Case No. S-238691 (LX) – an Administrative Consent Order was issued as one of a series of similar orders negotiated by a NASAA multistate task force for the following violations:

  • Offering and selling unregistered, non-exempt securities in Wisconsin; failing to invest sufficient resources for compliance with Blue Sky laws, rules, and regulations; failing to maintain adequate supervision systems to prevent the sale of unregistered, non-exempt securities by LPL to its customers; and certain other deficiencies within LPL’s compliance structure relating to Blue Sky law, rules, and regulations during the period of approximately October 1, 2006 through May 1, 2018.

Order issued January 23, 2019.

 

John D. Ernst – DFI Case No. S-236002 (EX) – a Consent Order to Cease and Desist, Revoking Registration Exemptions, Barring Future Registration, and for Disgorgement was issued against John D. Ernst for the following violations:

  • Ernst violated Wis. Stat. § 551.412(4)(m) and Wis. Admin. Code § DFI-Sec 4.06(2)(i) when he violated:
    1. FINRA Rule 1031 by selling private placement investments for which he was not qualified or properly registered to sell; and
    2. FINRA Rules 3270 and 3280 by engaging in private securities transactions on behalf of Woodbridge in exchange for compensation without providing notice or obtaining approval from Forester's.
  • Ernst violated Wis. Stat. 551.412(4)(m) and Wis. Admin. Code § DFI-Sec.4.06(2)(c) when he effected securities transactions on behalf of Woodbridge which were not recorded on the regular books or records of Forester’s Equity Services, Inc. (“Forester’s”), failed to disclose the transactions to Forester’s, and failure to obtain authorization in writing from Forester’s prior to the execution of the transactions on behalf of Woodbridge.

Order issued January 24, 2019.

This Order supersedes and replaces the previous Order issued against John Ernst on January 3rd, 2019 due to a technical correction.

 

Justin B. Koneck and Game Plan Financial, LLC – DFI Case No. S-235766 (EX) – an Order to Cease and Desist and for Permanent Bar of Investment Adviser and Investment Adviser Representative Registrations was issued against Justin B. Koneck and Game Plan Financial, LLC for the following violations:

  • Respondents violated Wis. Stat. § 551.412(4)(a) when they submitted an application for investment adviser representative registration that failed to describe Koneck’s correct employment status and history by misrepresenting that his employment with the IA Employer had terminated in December 2015.
  • Respondents violated Wis. Stat. § 551.412(4)(c) when Koneck was convicted of three misdemeanors involving an aspect of business involving securities and investments.

Order issued January 23, 2019.

 

Cumberland Capital Limited d/b/a Tropical Trade, Manford Martin Mponda, Hanna Bondarchuk, Greymountain Management, Ltd. a/k/a Grey Mountain Management, and David Cartu – DFI Case No. S-236793 (EX) – a Summary Order to Cease and Desist was issued against Cumberland Capital Limited d/b/a Tropical Trade, Manford Martin Mponda, Hanna Bondarchuk, Greymountain Management, Ltd. a/k/a Grey Mountain Management, and David Cartu for the following violations:

  • Tropical Trade, Mponda, and Bondarchuk violated Wis. Stat. § 551.401(1) by transacting business as a broker-dealer in Wisconsin without being registered under Ch. 551 or exempted from registration under Wis. Stat. § 551.401(2).
  • Tropical Trade, Mponda, and Bondarchuk violated Wis. Stat. § 551.301 by offering and selling unregistered securities in this state to a Wisconsin investor.
  • All Respondents violated Wis. Stat. § 551.501(3) by conducting their businesses, in connection with the offer and sale of securities, so as to operate a fraud and deceit upon a Wisconsin investor.
  • Greymountain and David Cartu materially aided and abetted the violations of Wis. Stat. §§ 551.301, 551.401, and 551.501(3) by Tropical Trade, Mponda, and Bondarchuk.

Order issued January 4, 2019.

 

John D. Ernst – DFI Case No. S-236002 (EX) – a Consent Order to Cease and Desist, Revoking Registration Exemptions, Barring Future Registration and for Disgorgement was issued against John D. Ernst for the following violations:

  • Ernst violated Wis. Stat. § 551.412(4)(m) and Wis. Admin. Code § DFI-Sec 4.06(2)(i) when he violated:
    1. FINRA Rule 1031 by selling private placement investments for which he was not qualified or properly registered to sell; and
    2. FINRA Rules 3270 and 3280 by engaging in private securities transactions on behalf of Woodbridge in exchange for compensation without providing notice or obtaining approval from Forester's.
  • Ernst violated Wis. Stat. 551.412(4)(m) and Wis. Admin. Code § DFI-Sec.4.06(2)(c) when he effected securities transactions on behalf of Woodbridge which were not recorded on the regular books or records of Forester’s Equity Services, Inc. (“Forester’s”), failed to disclose the transactions to Forester’s, and failure to obtain authorization in writing from Forester’s prior to the execution of the transactions on behalf of Woodbridge.

Order issued January 3, 2019.

This Order was replaced with the Order issued against John Ernst on January 3rd, 2019 due to a technical correction.

 

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