COMMISSION NEWS |
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ARIZONA CORPORATION COMMISSION |
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TO: EDITORS, NEWS DIRECTORS |
DATE: February 4, 1998 |
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FOR: IMMEDIATE RELEASE |
CONTACT: Serri Davila (602) 542-7368 |
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CORPORATION COMMISSION ORDERS CARRINGTON ESTATE PLANNING SERVICES TO PAY $10,000 IN PENALTIES |
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The Arizona Corporation Commission yesterday ordered Carrington Estate Planning Services (CEPS), its owner and two of its salesmen to stop offering and selling "McCarn's Allstate Finance High Promissory Notes" and to pay $10,000 in penalties. |
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Richard D. Carrington, 30, of Scottsdale owns CEPS. The salesmen involved were Blake E. Morrow, 25, and James W. White, 29, both of Mesa. |
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In May of 1997, the Commission’s Securities Division issued a Temporary Cease and Desist Order against CEPS, Carrington, Morrow, and White, alleging securities fraud and registration violations, as well as investment advising fraud and licensing violations. |
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The complaint alleged that the respondents were offering and selling unregistered securities in the form of promissory notes called High Interest Promissory Notes (HIPN). The HIPN is a nine-month note that offers a nine percent rate of return and requires a minimum investment of $25,000. Respondents sold the HIPN to approximately 23 investors. |
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The complaint also alleged that respondents engaged in investment advisory services without a license. Respondents neither admitted nor denied the allegations and were ordered to pay a fine of $10,000. |
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In a separate agreement on October 22, 1997, the Commission ordered the issuer of the HIPN, McCarn's Allstate Finance, a Florida corporation, to pay $1.8 million in restitution and a fine of $10,000. This fine was to be reduced to $5,000 if McCarn's Allstate Finance repaid all investors by November 30, 1997. McCarn's Allstate Finance provided the Division with documentation that all investors were repaid by November 30, 1997; however, the Division is still verifying the information. |
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"I encourage any HIPN investor who has not been refunded their investment to call Meg Pollard of the Securities Division at (602) 542-4242," said Michael G. Burton, Sr., Director of the Commission's Securities Division. |
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The Securities Division urges the public to inquire about the registration status of both the securities and the securities salesmen before investing. The Securities Division may be contacted at (602) 542-4242, by facsimile at (602) 594-7470, or by e-mail at accsec@ccsd.cc.state.az.us. |
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