Colorado Securities Commissioner Fred Joseph announced June 19 that he has entered a final cease-and-desist order against a Fort Collins real estate company and its two executives for allegedly violating the securities registration provisions of the Colorado Securities Act in connection with the offer of securities in Colorado.
Front Range Construction Capital Inc., its president, Randall L. Pope, and vice-president, Kyle C. Maulsby, are named in the order.
The securities devision alleges Front Range sought Colorado investors to finance short-term residential construction loans and renovation costs for distressed real estate, among other things. Front Range attempted to accomplish this by soliciting investors on its website to purchase shares of stock in Front Range, investigators said. Front Range promised investors returns of 8 to 12 percent, according to the order.
Front Range failed to register their security offering and, by offering the investment opportunity to the public at large through the use of the Internet, the company 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,” Joseph said. “Investors should always be wary of stock offerings promoted through the use of general advertising like the Internet. Contact our office to verify that securities have been properly registered before purchasing any security after seeing a website.”
The cease-and-desist order that Front Range, Pope and Maulsby agreed to orders them to immediately and permanently stop offering or selling unregistered securities in Colorado, or otherwise engaging in conduct in violation of any provision of the state securities act.