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Securities Administrative Orders Issued

Securities Administrative Orders Issued 2021

The following orders were issued by the Division pursuant to Wis. Stat. §551.605 with respect to various 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.

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Helen Frigates – Case No. S-243832 (EX) – a Summary Order to Cease and Desist was issued against Helen Frigates for the following violations:

  • Frigates violated Wis. Stat. § 551.402(1) by transacting business as an agent of a broker-dealer in Wisconsin without being registered under Ch. 551 or exempted from registration under Wis. Stat. §551.402(2).
  • Frigates violated Wis. Stat. § 551.301 by offering and selling unregistered securities in this state to a Wisconsin investor.
  • Frigates violated Wis. Stat. § 551.501(1-3) by implementing a scheme to conduct business, in connection with the offer and sale of securities, so as to operate a fraud and deceit upon a Wisconsin investor, including by and through use of misleading and material misstatements of fact.

Order issued December 22, 2021

 

Kaboom USA, LLC, Skearch, LLC, and Philip E. Fraley – Case No. S-240381 (EX) a Final Order by Consent to Cease and Desist with Penalties was issued against Kaboom USA, LLC, Skearch, LLC, and Philip E. Fraley for the following violations:

  • Fraley, Kaboom, and Skearch violated Wis. Stat. § 551.501(2) when in connection with the offer, sale, or purchase of a security, they omitted to state material facts to investors, including but not limited to the fact Fraley had failed to make payments to other investors as agreed to under the promissory notes, failed to provide financial statements and information, and failed to disclose he was the subject of previous delinquent tax warrants, money judgments, foreclosures, and criminal felony charges.
  • Fraley, Kaboom, and Skearch violated Wis. Stat. § 551.301 when they offered and sold securities in Wisconsin that were not registered under Ch. 551, were not exempt from registration and were not federal covered securities.

Order issued December 13, 2021

 

Randy L. Mayer – Case No. S-242139 (EX) – a Final Order was issued against Randy L. Mayer for the following violations:

  • Mayer transacted business as an unregistered investment adviser in violation of Wis. Stat. § 551.403(1).
  • Mayer employed a device, scheme, or artifice to defraud, and engaged in an act, practice, or course of business that operates or would operate as a fraud or deceit upon a Wisconsin investor in violation of Wis. Stat. §§ 551.502(1)(a) and 551.502(1)(b) by using a Wisconsin’s investor’s money in a manner contrary to what Mayer had represented, and for Mayer’s personal benefit.
  • Mayer failed to disclose his prior criminal history of dishonesty as set forth above to a Wisconsin investor in violation of Wis. Stat. § 551.501(2).
  • Mayer engaged in an act, practice, or course of business that operates or would operate as a fraud or deceit upon a Wisconsin investor in violation of Wis. Stat. § 551.501(3) when he provided Investor CG with ongoing fake investment account statements.

Order issued November 9, 2021

 

Daniel L. Van Houten – Case No. S-236002 (EX) – a Summary Order to Cease and Desist Including Civil Penalties was issued against Daniel L. Van Houten for the following violations:

  • Van Houten violated Wis. Stat. § 551.402(1) when he offered and sold securities in Wisconsin without being registered as an agent or properly exempted from registration as an agent under Ch. 551.

Order issued November 9, 2021

 

Behuz Investment & Sabella Ozan – Case No. S-244039 (EX) – a Summary Order to Cease and Desist was issued against Behuz Investment & Sabella Ozan for the following violations:

  • Behuz Investment and Sabella Ozan violated Wis. Stat. § 551.301 when they offered and sold securities in Wisconsin without those securities being registered or exempted from registration.
  • Behuz Investment violated Wis. Stat. § 551.401(1) when it transacted business as a broker-dealer in Wisconsin without being registered or exempted from registration under Ch. 551.
  • Sabella Ozan violated Wis. Stat. § 551.402(1) when Sabella Ozan transacted business as an agent of a broker-dealer in Wisconsin without being registered or exempted from registration under Ch. 551.
  • Behuz Investment and Sabella Ozan violated Wis. Stat. § 551.501(2) when they offered and sold securities while misrepresenting to Investor GS the profits that could be earned from his investment. They also failed to disclose the lawsuits pending against their affiliate Bitmex, the illiquidity of the investment, the risks and terms of the investment, and the principals of Behuz Investment.

Order issued November 4, 2021

 

John F. Kornack – Case No. S-236002 (EX) – a Summary Order to Cease and Desist was issued against John F. Kornack for the following violations:

  • Kornack violated Wis. Stat. § 551.402(1) when he offered and sold securities in Wisconsin without being registered as an agent or properly exempted from registration as an agent under Ch. 5.

Order issued November 2, 2021

 

Darien J. Smiley & Joseph J. Gibbs – Case No. S-242116 (EX) – a Final Order was issued against Darien J. Smiley & Joseph J. Gibbs for the following violations:

  • Darien J. Smiley, aka Devon Reed, violated Wis. Stat. § 551.401(1) when he transacted business in this state as a broker-dealer without being registered under Ch. 551 or exempted from registration.
  • Joseph J. Gibbs violated Wis. Stat.§ 551.402(1) when he transacted business in this state as an agent of a broker-dealer without being registered as an agent under Ch. 551 or exempted from registration.
  • Darien J. Smiley, aka Devon Reed, and Joseph J. Gibbs, violated Wis. Stat. § 551.301(1) when they offered and sold unregistered securities in this state that were not federal covered securities and were not exempt from registration.
  • Darien J. Smiley, aka Devon Reed, and Joseph J. Gibbs violated Wis. Stat. § 551.501(3) when they engaged in an act, practice or course of business that operates or would operate as a fraud or deceit upon another person.

Order issued September 17, 2021

 

Capital Pelli SRL – Case No. S-244221 (FX) – a Summary Order to Cease and Desist and Revoking Franchise Registration was issued against Capital Pelli SRL for the following violations:

  • Capital Pelli SRL violated Wis. Stat. § 553.26(1) when it failed to upload an offering circular in a form required by Wis. Stat. § 553.27(4) with the franchise registration for Capital Pelli SRL.

Order issued September 13, 2021

 

Randy L. Mayer – Case No. S-242139 (EX) – a Summary Order to Cease and Desist Including Restitution and Civil Penalties was issued against Randy L. Mayer for the following violations:

  • Mayer transacted business as an unregistered investment adviser in violation of Wis. Stat. § 551.403(1).
  • Mayer employed a device, scheme, or artifice to defraud, and engaged in an act, practice, or course of business that operates or would operate as a fraud or deceit upon a Wisconsin investor in violation of Wis. Stat. §§ 551.502(1)(a) and 551.502(1)(b) by using a Wisconsin investor’s money in a manner contrary to what Mayer had represented, and for Mayer’s personal benefit.
  • Mayer failed to disclose his prior criminal history of dishonesty as set forth above to a Wisconsin investor in violation of Wis. Stat. § 551.501(2).
  • Mayer engaged in an act, practice, or course of business that operates or would operate as a fraud or deceit upon a Wisconsin investor in violation of Wis. Stat. § 551.501(3) when he provided a Wisconsin investor with ongoing fake investment account statements.

Order issued September 1, 2021

 

Matthew J. Wetzel – Case No. S-242295 (EX) – a Summary Order to Cease and Desist was issued against Matthew J. Wetzel for the following violations:

  • Wetzel violated Wis. Stat. § 551.301(1) when he offered securities which were not registered or exempted from registration under Ch. 551 or federally covered securities.
  • Wetzel violated Wis. Stat. § 551.501(2) when he offered securities while omitting material facts, including but not limited to the numerous judgments, lawsuits, and tax warrants against him and his business, Laughing Grass.

Order issued August 31, 2021

 

Darien J. Smiley & Joseph J. Gibbs – Case No. S-242116 (EX) – a Summary Order to Cease and Desist was issued against Darien J. Smiley and Joseph J. Gibbs for the following violations:

  • Darien J. Smiley, aka Devon Reed, violated Wis. Stat. § 551.401(1) when he transacted business in this state as a broker-dealer without being registered under Ch. 551 or exempted from registration.
  • Joseph J. Gibbs violated Wis. Stat. § 551.402(1) when he transacted business in this state as an agent of a broker-dealer without being registered as an agent under Ch. 551 or exempted from registration.
  • Darien J. Smiley, aka Devon Reed, and Joseph J. Gibbs, violated Wis. Stat. § 551.301(1) when they offered and sold unregistered securities in this state that were not federal covered securities and were not exempt from registration.
  • Darien J. Smiley, aka Devon Reed, and Joseph J. Gibbs violated Wis. Stat. § 551.501(3) when they engaged in an act, practice or course of business that operates or would operate as a fraud or deceit upon another person.

Order issued August 5th, 2021

 

Charles Winn, LLC & Charlie Jake Smith– Case No. S-242235 (EX) – a Summary Order to Cease & Desist Including Restitution and Civil Penalties was issued against Charles Winn, LLC & Charlie Jake Smith for the following violations:

  • Winn and Smith violated Wis. Stat. 551.301 when they offered and sold securities in Wisconsin which were not registered or exempted from registration under Ch. 551, or federally covered securities.
  • Winn and Smith violated Wis. Stat. 551.403(1) when they transacted business in Wisconsin as an investment adviser without being registered or exempted from registration under Wis. Stat. § 551.403(2).
  • Winn and Smith violated Wis. Stat. 551.501(2) when they omitted to state a material fact necessary in order to make statements made, in light of the circumstances under which they were made, not misleading, including but not limited to the regulatory orders issued against Winn in Texas, Washington, Illinois, and Michigan for their unlawful conduct in offering and selling securities.
  • Winn and Smith violated Wis. Stat. 551.501(2) when they made misrepresentations in connection with the offer and sale of a security, including but not limited to the misstatement that they were established in 2006.

Order issued July 28, 2021

 

Ronald R. Shepard– Case No. S-243881 (EX) – a Summary Order to Cease & Desist was issued against Ronald R. Shepard for the following violations:

  • Shepard violated Wis. Stat. § 551.301(1) when he offered securities which were not registered or exempted from registration under Ch. 551 or federally covered securities.
  • Shepard violated Wis. Stat. § 551.501(2) when he offered securities while omitting material facts, including but not limited to his previous felony convictions for fraud and theft.

Order issued July 14, 2021

 

BoomFX Trades.Online & Alfred Brent – Case No. S-242135 (EX) – a Summary Order to Cease and Desist was issued against BoomFX Trades.Online & Alfred Brent for the following violations:

  • BoomFX and Brent violated Wis. Stat. § 551.401(1) when they transacted business in Wisconsin as a broker-dealer without being registered under Ch. 551 or exempted from registration under Wis. Stat. § 551.401(2).
  • BoomFX and Brent violated Wis. Stat. § 551.301(1) when they offered securities that were not registered under Ch. 551, federally covered, or exempted from registration under Ch. 551.
  • Brent violated Wis. Stat. § 551.501(2) when he made an untrue statement of a material fact by telling Investor PC that Brent was licensed as a Customs Broker License with the Financial Services Commission of Mauritius, when in fact no such license or registration exists with that agency.

Order issued June 15, 2021

 

John M. Stevens & Service Financial, LLC – Case No. S-240800 (EX) – a Final Order by Consent to Cease & Desist was issued against John M. Stevens & Service Financial, LLC for the following violations:

  • Stevens and Service Financial violated Wis. Stat. § 551.402(1) when they transacted business in Wisconsin as an investment adviser without being registered under Ch. 551 or being exempted from registration under Wis. Stat. § 551.402(2).
  • Stevens and Service Financial violated Wis. Stat. § 551.402(4) when they associated with or employed Villanueva to solicit clients without Villanueva being registered under Ch. 551 or exempted from registration under Wis. Stat. § 551.402(2).
  • Stevens and Service Financial violated Wis. Stat. § 551.502(1)(a) when they employed a device, scheme, or artifice to defraud Investor AC, including but not limited to holding themselves out as being registered investment advisers when they were not registered, sending false and deceptive account statements to Investor AC, and failing to disclose the numerous civil suits, judgments, and foreclosures against Stevens.
  • Stevens and Service Financial violated Wis. Stat. § 551.502(1)(b) they employed a device, scheme, or artifice to defraud Investor AC, including but not limited to holding themselves out as being registered investment advisers when they were not registered, sending false and deceptive account statements to Investor AC to induce her to liquidate pre-existing securities and invest them with Stevens and Service Financial, and failing to disclose the numerous civil suits, judgments, and foreclosures against Stevens.
  • Stevens and Service Financial violated Wis. Stat. § 551.501(1) when in connection with the offer, sale, or purchase of a security, they employed a device, scheme, or artifice to defraud Investor AC, including but not limited to holding themselves out as being registered investment advisers when they were not registered, sending false and deceptive account statements to Investor AC to induce her to liquidate pre-existing securities and invest them with Stevens and Service Financial, and failing to disclose the numerous civil suits, judgments, and foreclosures against Stevens.
  • Stevens and Service Financial violated Wis. Stat. § 551.501(2) when in connection with the offer, sale, or purchase of a security, they made misrepresentations of material facts to Investor AC, including but not limited to holding themselves out as being registered investment advisers when they were not registered and sending false and deceptive account statements to Investor AC to induce her to liquidate pre-existing securities and invest them with Stevens and Service Financial.
  • Stevens and Service Financial violated Wis. Stat. § 551.501(2) when in connection with the offer, sale, or purchase of a security, they omitted to state material facts to Investor AC, including but not limited to the fact that neither Stevens or Service Financial were registered to offer or sell securities or investment advice, and the fact that Steven was the subject of numerous previous civil actions, money judgments, and foreclosures.
  • Stevens and Service Financial violated Wis. Stat. § 551.501(3) when in connection with the offer, sale, or purchase of a security, they employed a device, scheme, or artifice to defraud Investor AC, including but not limited to holding themselves out as being registered investment advisers when they were not registered, sending false and deceptive account statements to Investor AC to induce her to liquidate pre-existing securities and invest them with Stevens and Service Financial, and failing to disclose the numerous civil suits, judgments, and foreclosures against Stevens.

Order issued June 11, 2021

 

John L. Adkins – Case No. S-243677 (EX) – a Consent Order to Cease and Desist was issued against John L. Adkins for the following violations:

  • Adkins violated Wis. Stat. § 551.301(1) when he offered securities which were not federally covered, registered, or exempted from registration in Wisconsin.
  • Adkins violated Wis. Stat. § 551.402(1) when he transacted business as an agent in Wisconsin without being registered under Ch. 551 or exempted from registration under § Wis. Stat. § 551.401(2).
  • Adkins violated Wis. Stat. § 551.501(3) when he engaged in an act, practice, or course of business that operates or would operate as a fraud or deceit upon another person by directing a Wisconsin resident to utilize a VPN to illegally invest in EndoTech.

Order issued May 26, 2021

 

American Shaman Franchise System, LLC – Case No. S-242323 (FX) – a Consent Order to Cease and Desist was issued against American Shaman Franchise System, LLC for the following violations:

  • American Shaman violated Wis. Stat. § 553.21 when they sold a franchise in Wisconsin without being registered with the Division.
  • American Shaman violated Wis. Stat. § 553.21 when they sold a franchise in Wisconsin without being registered with the Division.
  • American Shaman violated Wis. Stat. § 553.41(1) when it filed offering circulars which failed to disclose material facts, including but not limited to Miley’s role in the company, and Miley’s prior bankruptcy.
  • American Shaman violated Wis. Stat. § 553.41(4) when it omitted to state material facts required to be disclosed in writing in the franchisor’s offering circular, including but not limited to Miley’s role in the company and Miley’s prior bankruptcy.

Order issued May 5, 2021

 

Christopher L. Leach – Case No. S-238505 (EX) – an Amended Summary Order to Cease and Desist, Revoking Exemptions and Imposing Restitution with Interest and Civil Penalties was issued against Christopher L. Leach for the following violations:

  • Leach violated Wis. Stat. § 551.505 when he made or caused to be made in a record that is used in an action or proceeding or filed under this chapter, one or more statements that, at the time and in the light of the circumstances under which they were made, were false or misleading in a material respect, or, in connection with the statements, omitted to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not false or misleading.
  • Leach violated Wis. Stat. § 551.501(2) when in connection with the offer, sale or purchase of securities, 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.
  • Leach violated Wis. Stat. § 551.501(3) when in connection with the offer, sale or purchase of securities, directly or indirectly, he engaged in an act, practice or course of business that operates or would operate as a fraud or deceit upon another person.

Order issued April 21, 2021

 

Daniel C. Cunningham & PV Wealth Advisors, LLC – Case No. S-238505 (EX) – an Amended Summary Order to Cease and Desist, Revoking Exemptions and Imposing Restitution with Interest and Civil Penalties was issued against Daniel C. Cunningham & PV Wealth Advisors, LLC for the following violations:

  • Daniel Cunningham violated Wis. Stat. § 551.402(1) by transacting business in Wisconsin as an agent of PV Wealth Advisors without registration as an agent and without being exempt from registration.
  • As aided and abetted by Leach, Daniel Cunningham and PV Wealth Advisors violated Wis. Stat. § 551.501(2), when in connection with the offer, sale or purchase of securities, directly or indirectly, Cunningham 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.
  • As aided and abetted by Leach, Daniel Cunningham and PV Wealth Advisors violated Wis. Stat. § 551.501(3) when in connection with the offer, sale or purchase of securities, directly or indirectly, they engaged in an act, practice or course of business that operates or would operate as a fraud or deceit upon another person.

Order issued April 21, 2021

 

Laurent Perron – Case No. S-242060 (FX) – a Consent Order to Cease and Desist and Imposing Administrative Assessment was issued against Laurent Perron for the following violations:

  • Perron violated Wis. Stat. § 553.21 when they sold a franchise in Wisconsin without being registered with the Division.
  • Perron violated Wis. Stat. § 553.27(4) when they sold a franchise in Wisconsin without providing a copy of the offering circular for The Margarita Man to Wisconsin Franchisees at least 14 days prior to the execution of the franchise agreement.

Order issued April 21, 2021

 

Christopher Soulier – Case No. S-236002 (EX) – a Summary Order to Cease and Desist and Imposing Civil Penalties was issued against Christopher Soulier for the following violations:

  • Soulier violated the terms of the May 23, 2019 Consent Order when he failed to pay disgorgement to his investor victims.
  • Soulier violated the terms of the May 23, 2019 Consent Order when he failed to provide any proof of disgorgement payments to the Division.

Order issued March 18, 2021

 

Christopher L. Leach – Case No. S-238505 (EX) – a Summary Order to Cease and Desist, Revoking Exemptions and Imposing Restitution with Interest and Civil Penalties was issued against Christopher L. Leach for the following violations:

  • Leach violated Wis. Stat. § 551.505 when he made or caused to be made in a record that is used in an action or proceeding or filed under this chapter, one or more statements that, at the time and in the light of the circumstances under which they were made, were false or misleading in a material respect, or, in connection with the statements, omitted to state a material fact necessary to make the statements made, in the light of the circumstances under which they were made, not false or misleading.
  • Leach violated Wis. Stat. § 551.501(2) when in connection with the offer, sale, or purchase of securities, 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 February 10, 2021

 

Daniel C. Cunningham & PV Wealth Advisors, LLC– Case No. S-238505 (EX) – a Summary Order to Cease and Desist, Revoking Exemptions and Imposing Restitution with Interest and Civil Penalties was issued against Daniel C. Cunningham and PV Wealth Advisors, LLC for the following violations:

  • Cunningham violated Wis. Stat. § 551.501(2) when in connection with the offer, sale, or purchase of securities, 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 February 10, 2021

 

FX-Bittrade and Frederick Smith– Case No. S-242022 (EX) – a Summary Order to Cease and Desist was issued against FX-Bittrade and Frederick Smith for the following violations:

  • Smith and FX-Bittrade violated Wis. Stat. § 551.301 when they offered and sold securities in Wisconsin without those securities being registered or exempted from registration.
  • Smith and FX-Bittrade violated Wis. Stat. § 551.401(1) when they transacted business as a broker-dealer in Wisconsin without being registered or exempted from registration under Ch. 551.
  • Smith and FX-Bittrade violated Wis. Stat. § 551.501(2) when they offered and sold securities while misrepresenting to investors that FX-Bittrade was affiliated with PayPal when in fact, it had no relationship with PayPal.

Order issued January 27, 2021

 

Michael F. Shillin & Shillin Wealth Management, LLC– Case No. S-242215 (LX) – a Summary Order to Cease and Desist, Revoking Exemptions and Barring Registration was issued against Michael F. Shillin & Shillin Wealth Management, LLC for the following violations:

  • Shillin engaged in dishonest or unethical practices in the insurance and securities businesses in violation of Wis. Stat. §§ 551.412(4)(m) and 551.412(4r).
  • Shillin is subject to discipline pursuant to Wis. Stat. § 551.412(4)(e)3 because he was barred by FINRA from associating with any member firms in any capacity on December 18, 2020.
  • Shillin is subject to discipline pursuant to Wis. Stat. § 551.412(4)(L) because he was ordered to cease and desist from all activities of an insurance intermediary by OCI effective December 21, 2020.
  • Shillin was in violation of Wis. Stat. § 551.501(2), when he, in connection with the offer, sale or purchase of a security, directly or indirectly, 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, including the failure to inform potential investors of Megahoot about the disciplinary actions taken against him by FINRA and OCI and the current investigation by the Division.

Order issued January 22, 2021

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