Plastic surgery company repays investment funds to Montrose investor two years after initial order
Rick Frisk and New Body MD return funds following court order
DENVER (Nov. 9, 2015) – An elderly Colorado investor will receive more than $60,000 in returned funds nearly two years after being sold securities by Rick Frisk and New Body MD. Frisk and New Body MD initially agreed to pay restitution in January 2014 pursuant to a cease and desist order issued by the Commissioner for the Colorado Division of Securities, part of the Department of Regulatory Agencies (DORA). After failing to make full payment, the Commissioner initiated a second action against them alleging securities fraud and unlicensed sales activity.
New Body MD is a plastic surgery center which lists Frisk as the managing member. Frisk is a resident of Seattle, Washington and New Body MD operates out of Sacramento, California. The Securities Commissioner’s case originally resulted in a settlement with Frisk and New Body in January 2014. A Division of Securities investigation revealed that Frisk and New Body MD used an unlicensed broker-dealer sales representative to sell a $75,000 promissory note to an 81 year old investor who resides in Montrose, Colorado.
The unlicensed representative received a commission of over $11,000 for this sale, paid by the respondents in the case. In addition to utilizing an unlicensed representative, the security in question — the promissory note — was neither properly registered nor was it exempt from registration with the Division. Frisk and New Body MD agreed to pay back the $75,000 to the investor. Instead, only $15,000 was paid.
In October 2015, following the non-payment by Frisk and New Body, the Commissioner filed a second action: a complaint for injunctive relief and damages against Frisk and New Body MD in Denver District Court. Frisk and New Body MD again agreed to settle and have paid back the full amount of restitution. The Division obtained a court order this week approving distribution of the funds to the investor.
“Addressing the financial exploitation of the elderly is one of the top priorities in our office,” stated Securities Commissioner Gerald Rome. “In this case, our investor was cold-called, taken advantage of, and sold an investment that was totally inappropriate for her. When they failed to live up to their initial agreement, we elected to pursue a more serious enforcement action in order to ensure recovery of the funds owed to our investor. We will continue to aggressively pursue these kinds of cases.”
The Securities Commissioner was represented by Assistant Attorney General Cathern Smith from the Colorado Attorney General’s office.
Division of Securities