FLASH: Missouri Regulators Say Pet-Food Firm Sold Unregistered Securities In State And Now Is Raising Funds In California Under Different Name To Pay Back Investors

FLASH: In a complicated case unfolding in Missouri, regulators say pet-food firms operated by Frank Renick sold unregistered securities in the state under one set of names and that Renick is raising funds under a different corporate name through a California “cloud” office to pay back investors.

Renick’s actual presence in California was a virtual office that provided voicemail service, a California phone number and a California street address from which mail was forwarded to Renick in Missouri, investigators said.

Missouri has issued a cease-and-desist order through the the state’s Securities Division against Spectrum Pet Care Inc., Spectrum Pet Foods Inc. and SPC Brands Inc., amid claims that the firms have sold more than $6 million in “unregistered stocks and bonds” in part by trading on the names of famous companies.

The announcement was made by Missouri Secretary of State Robin Carnahan, who oversees the Securities Division.

“My office will continue to go after everyone who misleads Missourians into investing with them,” Carnahan said.

Regulators increasingly have been confronting securities schemes in which unregistered firms and individuals assert ties to famous brands to establish the veneer of success and lull investors into a false sense of security. Renick’s ties with certain famous companies were theoretical, minor or nonexistent, according to records.

Over time, according to investigators, the scheme got ported to California, and newspaper ads promoting a “guaranteed annual dividend” of 8.75 percent appeared as recently as last month.

Robin Carnahan, Missouri Secretary of State.

“The order alleges that Renick is currently attempting to raise funds in the State of California under the business name Consolidated Food Group, Inc., in order to pay back those individuals who invested in Spectrum,” Carnahan’s office said.

Consolidated Food Group, which organized in California for business on Dec. 30, 2010, with Renick as its president,  used an address in Carlsbad, according to records. Renick’s address is in New Florence, Mo., and the Spectrum entities use an address in Montgomery City, Mo.

Spectrum asserted it was “going public” and that its stock value would “double,” but Renick did not “disclose to investors that Spectrum had little revenue,” investigators said.

“Renick also allegedly used his investors’ funds to pay off previous investors and to pay personal expenses,” investigators said.

Among the victims is a 74-year-old resident of Kansas City who gave Renick $20,000 after seeing a newspaper ad and listening to a Rennick pitch, investigators said.

Separately, a 62-year-old St. Louis resident gave Renick $45,000, investigators said.

“Renick told the investor that Spectrum was going to merge with an international pet food and candy manufacturer, that he had meetings set up with a billion-dollar agriculture and home improvement retailer, and a worldwide convenience store chain contacted Renick about putting Spectrum products in 3,300 stores,” investigators said.  “Securities Division investigators contacted the agriculture retailer, which said Renick scheduled a meeting but didn’t show up, and the convenience store chain, which said that the company hadn’t placed Spectrum products in its stores and never agreed to do so.”

Read the cease-and-desist order.