Local author fights against SEC allegations
SOUTH LAKE TAHOE, Calif. — Local author and financial expert Loral Langemeier is fighting back after the Securities Exchange Commission made several accusations against her.
According to the lawsuit filed in the District Court of Nevada in June, the SEC alleges Langemeier acted an unregistered broker in the sale of oil and gas securities, actively participated in the offer and sale of unregistered securities, and failed to disclose material conflicts of interest while acting as an investment adviser.
The suit comes from a business relationship Langemeier had with Thomas Joseph Powell, the founder of Resolute Capital Partners, Ltd. Powell spoke at several of Langemeier’s Big Table events about the benefits of alternative investments in oil and gas.
“What happens sometimes the folks at the big table events that pay their seminar fees think, ‘geez, now I’m interested in all the stuff I’m learning, where can I actually find some of these investment opportunities,’ and that’s where Tom Powell, it was really his company, Resolute Capital Partners, that was the issuer and set up all these oil and gas investments,” William Uchimoto, Langemeier’s attorney, said.
Uchimoto used to work at the SEC, as well as serving as general counsel at the Philadelphia Stock Exchange and is familiar with securities law.
“By actively soliciting their clients to purchase the oil and gas securities, they engaged in the business of effecting transactions in securities for others. They provided advice on the merits of the offerings and received transaction-based compensation in the form of undisclosed sales commissions from RCP and Homebound,” the lawsuit states.
Through these Big Table events, Powell was able to find investors, although Uchimoto said the events were not the only place Powell found leads.
“His firm’s the one that took the money, that did the PPMs [a memorandum to attract outside investors], it was their whole project,” Langemeier said. “Just because the client came from me doesn’t mean I took any of their investor dollars.”
A separate case was brought against Powell and RCP which was settled.
Part of the issue comes from the SEC referring to Langemeier as an “unregistered broker.” According to the SEC guidelines, a broker is, “any person engaged in the business of effecting transactions in securities for the account of others.”
However, the SEC recently proposed a “finder” exemption.
“These so-called ‘finders,’ who may identify and in certain circumstances solicit potential investors, help to bridge the gap between small businesses that need capital and investors who are interested in supporting them,” the SEC’s website states.
“I think Loral falls squarely in that bucket, that she might have given some leads to Tom Powell and Resolute Capital Partners,” Uchimoto said. “It’s ironic and sort of hypocritical that the SEC enforcement department is bringing these charges against Loral at the same time that another arm of the SEC is proposing exemption relief for the limited stuff that Loral did.”
The SEC offered Langemeier a settlement but she refused, stating that a settlement is basically an admission of guilt.
If found liable, Langemeier would need to stop participating in the sale of any security, “disgorge their ill-gotten gains, together with prejudgment interest thereon,” and pay civil penalties.
Langemeier said since she already does not sell securities, that part wouldn’t be a big deal and the penalties wouldn’t be much comparatively but the real hit, if she were to lose, would be to her reputation.
“I will continue to fight for my reputation,” Langemeier said. “ I have nothing to hide, nothing to be embarrassed about or ashamed of.”
Uchimoto said they are going to file a motion for summary judgment asking the judge to throw out the case, but if that doesn’t work, they intend to fight in court. No court date has been set yet.
The SEC did not respond to a request for comment.
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