Arizona companies sanctioned and sales agents permanently barred from Colorado securities industry
DENVER (Oct. 13, 2016) — Denver District Judge A. Bruce Jones entered orders of permanent injunction against Preferred Spectrum Investments, LLC along with partner companies License Acquisitions, LLC, Caribe Spectrum Holdings, Inc., and sales representatives James Daly, Steven Dewitt, David Meredith, Brian O’Shaughnessy, and Jay Rhodes, which included barring all three companies, and Dewitt, Meredith and Rhodes from the securities industry in Colorado. These sanctions were imposed as a result of a complaint filed by Colorado Division of Securities, part of the Department of Regulatory Agencies (DORA) against them for unlicensed securities activity in the state.
The Division’s investigation revealed that Preferred Spectrum, License Acquisitions, and Caribe Spectrum Holdings hired the five Colorado sales agents to solicit investors in each of the companies’ private offering of securities. All three companies share the same address in Phoenix, Arizona, and all offered similar type investment opportunities in wireless and cellular technology in Puerto Rico, U.S. Virgin Islands, and Dominican Republic. The five sales agents, who reside in Colorado, solicited primarily out of state investors, and raised over one million dollars for the three companies. None of the sales agents were licensed to sell securities in Colorado. In fact, sales agents David Meredith, Brian O’Shaughnessy, and Jay Rhodes had all previously held securities licenses in other states, and had faced previous disciplinary action.
“We license securities sales agents for a reason,” said Securities Commissioner Gerald Rome. “It ensures a minimum level of competency that investors can rely on, but more importantly, it is a mechanism to keep the bad apples out of Colorado. So we take it very seriously when individuals, like the companies and five sales agents here, flout the law by failing to obtain proper licensing. And as a result, they suffered the consequences.”
In the agreements submitted to Denver District Court, the Division requested the permanent injunctions along with payment of $28,500 to the Division and judgments in the amount of $102,500. The parties that agreed to the entry of an injunction did so without an admission of liability as to the claims of the Division, but recognize that if violated, further action by the Division or the court may be taken.