Rio National Insurance Services ordered to pay more than $790,000 in restitution

DENVER (Aug. 17, 2016) — An order issued on August 11 has placed a permanent and immediate injunction on the unlawful sale of unregistered securities, engaging in business in violation of licensing requirements under the Colorado Securities Act, and commission of securities fraud in the future by Rio National Insurance Services, Inc. and its president Steven Kerbel, of Colorado Springs. In addition, defendants Kerbel and Rio National are ordered to pay $790,719.45 in restitution.

The order is in response to an amended complaint filed by Colorado Securities Commissioner Gerald Rome, in which he alleged that the defendants had failed to comply with a previous stipulated cease and desist order in which they were to repay restitution totaling $800,719.45. The funds, which were due to be returned with interest by June of 2015, remain mostly unpaid.

According to the district court complaint filed by the Securities Commissioner, Rio National operated against the terms of Colorado Securities Act by employing unlicensed representatives to solicit and sell unregistered, non-exempt securities to at least 15 investors in Colorado and Kansas. These investments totaled around $1.1 million in promissory notes, a number of which were renewed with investors when the company failed to return principal payments at the designated time.

One unlicensed agent solicited elderly clients to invest in the promissory notes, which the agent claimed would yield 8-to-10 percent returns. In the pursuit of these sales, for which the agent earned commissions of around $58,500, the agent did not disclose to investors that her license had lapsed and that she was selling unregistered securities.

In 2014, following the issuance of a cease and desist order by the Securities Commissioner, defendants Kerbel and Rio National acknowledged violating the licensing provisions of the Colorado Securities Act, and committed to repaying the principal investments of these clients along with accrued interest by June of the following year. However, as the deadline for repayment came and went, the Division of Securities, part of the Department of Regulatory Agencies (DORA), continued to field calls from the investors stating that no payments had been made. Two investors have since passed away.

“We always attempt to resolve cases at the lowest possible level whenever we can,” stated Rome. “Unfortunately this is not the first case where we have had to file a district court action because defendants failed to meet their restitution obligation. We take promises to repay investors seriously. Violation of a cease and desist order will not go ignored.”

A contempt of court action could follow any future violation of the terms of the injunction by Steven Kerbel or Rio National.

To file a complaint with the Division of Securities, visit or call (303) 894-2320.