Colorado Securities Commissioner Fred Joseph announced today that he has entered a final cease and desist order against a Texas man for allegedly violating the securities registration provisions of the Colorado Securities Act (“Act”) in connection with the offer of securities in and from Colorado. Named in the Order is Brian Creamer, who was doing business as Re-Cycles Motorsports, located in West Detroit, Texas.
The Staff of the Division of Securities (the “Staff”) alleged that from November of 2010 through February of 2011, Creamer offered to sell securities to Colorado investors by placing advertisements on the Internet under Craigslist’s Denver area website. In the ad, Creamer was seeking financing of $55,000 to $75,000 for his business, Re-Cycles Motorsports.
The Staff alleged that Creamer represented to potential investors that the investments would be used to purchase wrecked motorcycles from insurance companies, repair the motorcycles, and re-sell them for a profit. The investments would also be used to rent a building and obtain a business license. The Staff alleges that investors were promised 30% of sales, which would approximate a return up to or greater than $100,000 on their investment. The Staff alleged that Creamer failed to register its security offering and, by offering the investment opportunity to the public at large through the use advertisements, Creamer was unable to take advantage of any private offering exemption under the Act.
"Soliciting investors through general advertising for private offerings of securities is a violation of the law when those securities have not been registered," said Commissioner Joseph. "Investors should always be wary of stock offerings promoted through the use of general advertising, especially when the deal looks too good to be true. Contact our office to verify that securities have been properly registered before purchasing any security after seeing an ad."
The cease and desist order, which Creamer agreed to, orders them to immediately and permanently cease and desist offering or selling any “security” in or from the State of Colorado without first registering the securities in the State of Colorado or otherwise engaging in conduct in violation of any provision of the Act.
A copy of the Order can be found at:
http://www.dora.state.co.us/securities/enforcement.htm#CeaseDesist
