Articles Posted in State Securities Laws

The State of California stripped Eric Grace of his ability to legally sell investments in California

On May 18, 2016 Eric Grace, a former registered representative and investment advisor with Grace Capital Management of Torrance, CA was barred from acting as an investment advisor or broker dealer by the California Department of Business Oversight

The State of California earlier in the year had filed an accusation against Eric Grace, after he refused to provide them information relating to his business with Grace Capital Management.  The state had demanded access to Grace Capital Management’s offices for a routine examination in December, 2015 but found it closed.  They then left voice messages with Grace Capital Management, and sent certified letters, but received no response.

James Duhon and Source Capital Hit with Cease and Desist Order by California’s Department of Business Oversight

On October 10, 2016 the State of California’s Department of Business Oversight issued a cease and desist order against Source Capital and James Duhon over allegations they participated in an unqualified offering of securities to California residents.  The claim relates to an offering of securities in oil and gas programs overseen by the Blue Ridge Group, and includes the Belmont Drilling Program, the Galveston Bay Drilling Program and three other oil and gas drilling programs sold by among others, James Duhon and Source Capital.  The order also alleges that Source Capital and James Duhon offered and sold unqualified securities to the public by way of material omissions of fact.

The Commissioner alleges that from September 2010 through November, 2012,  James Duhon and Source Capital sold oil and gas securities to  investors without those securities being qualified for sale, and by way of either material omission of fact or through material omissions, including the rate of return that investors could expect from the programs managed by Blue Ridge Group.  One California based investor was told he could receive his money back any time he asked for it, which the Commissioner found to be materially inaccurate.

Five Star Financial Hit with Cease and Desist Order by California’s Department of Business Oversight

On August 9, 2016 the State of California’s Department of Business Oversight issued a cease and desist order against Five Star Financial (dba JBAH Insurance Solutions) and its control persons and officers Anna Holt and John Biyikoglu over charges that they sold securities to the public in the form of “JPMorgan Structured Investments” without being registered as a broker dealer, and by way of material ommisions of fact.

The Commissioner’s cease and desist order alleges that in 2014,  Five Star Financial, through its control persons Anna Holt and John Biyikoglu sold JPMorgan Structured Investments to California residents promising a return of between sixteen and twenty percent.  Upon receiving the funds from the investors, the company deposited the funds into an account where they were commingled for non investment purposes such as paying for general operating expenses, paying sales commissions and personal expenses, and repaying investors from other transactions.  The Commissioner further alleges that Biyikoglu told investors that their funds had increased in value, when in fact the money had been spent by Five Star Financial, rather than invested as described to the investors.