Missouri Man Banned From Investment Trade After Secretary Of State’s Office Discovers He Sold Unregistered Securities Of ‘Time-Share’ Resort To Senior Citizens In Their Eighties

Missouri Sectetary of State Robin Carnahan

A Missouri man who worked for a legitimate investment business near St. Louis sold unregistered securities in a Wisconsin-based, time-share “resort” business to elderly clients, Missouri officials said.

The securities came in the form of “unregistered real estate investments,” the officials said.

James McClellan Jr., of Chesterfield, never told 18 Missouri investors — at least six of whom were in their eighties — that the time-share business was experiencing financial difficulties and that the investments were not offered through his employer.

McClellan was a managing member of the out-of-state time-share business, the state charged. Officials identified the business as Meadow Ridge of Door County LLC, of Egg Harbor, Wisc.

McClellan now has been banned from the securities business by the state and assessed a penalty of $120,000. His former employer, Huntleigh Securities Corp., also was assessed a penalty of $120,000 for failure to supervise McClellan, who conducted “off the books” securities transactions, the state said.

“It is unacceptable for financial professionals to misuse their clients’ trust,” Missouri Secretary of State Robin Carnahan said. “My office made sure that this broker won’t be able to work in the industry in Missouri again and that his employer knows how to better supervise its employees.

Carnahan’s office called McClellan’s deal a “shady real estate scheme” into which investors had plowed more than $4.4 million.

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2 Responses to “Missouri Man Banned From Investment Trade After Secretary Of State’s Office Discovers He Sold Unregistered Securities Of ‘Time-Share’ Resort To Senior Citizens In Their Eighties”

  1. Quick note: Longtime readers will recall that Data Network Affiliates (DNA), the apparent predecessor company to OWOW, also announced that it was entering the “resort” business.

    The story above illustrates some of the dangers of the resort business, including the fact that many jurisdictions require that the investments be registered as securities.

    DNA specifically hawked something called the “DNA SPA & Resort” program, which purportedly featured a “No Interest Easy 24 Month Payment Plan” of $625 a month. DNA solicited U.S. prospects to spend $14,995 on the resorts program, suggesting that some prospects would put the entire amount on a credit card.

    At the same time DNA was hawking the resort program, it also was hawking a purported “mortgage reduction program.” This, too, was a potential land mine.

    Regardless, DNA, which now appears to have morphed into OWOW, promoted its mortgage-reduction and resort programs in a webinar, advertising the webinar by saying it believed “9 out of 10 people who attend this upcoming DNA Webinar will say ‘YES’ to DNA.”

    The “one” who says no will be offered the “FREE DNA PSYCHIATRIC DISCOUNT PLAN,” DNA said in an email to members.

    http://patrickpretty.com/2010/07/04/data-network-affiliates-churches-have-moral-obligation-to-pitch-members-on-firms-mortgage-reduction-program-purported-data-and-cell-phone-firm-venturing-into-foreclosure-rescue-and-resor/

    Patrick

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  2. He’s been shown!

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