OFIS warns consumers to be on the lookout for sellers of fraudulent securities
LANSING –Office of Financial and Insurance Services (OFIS) Commissioner Linda A. Watters is warning consumers about an investment fraud that may be targeted at Michigan residents.
OFIS has received information from the North American Securities Administrators Association indicating that more than 20 Michigan consumers have invested through Malory Investments, LLC and Capital Guardian, Inc. (now reorganized as Precision Capital Services, Inc.), both operating out of California. The two companies may have sold more than 240 fraudulent securities offerings nationwide worth more than $1 billion.
Of particular concern to Michigan investors are offerings under the names of LifeLine Imaging of Los Gatos, LifeLine Imaging of Long Beach, LifeLine Imaging Unit Investment Partnership, or LifeLine Imaging Systems, Inc.
Information obtained by OFIS indicates that the Alabama Securities Commission issued a cease and desist order against Malory and Capital Guardian in July 2007 for employing unregistered sales agents, paying undisclosed sales commissions, fraudulently overstating potential returns on investments, failing to disclose criminal backgrounds of principals, and failing to accurately disclose the use of proceeds, assets of the issuers, and other material information.
“According to the Alabama Securities Commission, these companies are believed to have engaged in a long-running scheme to defraud investors, and have been ordered to cease these activities,” Commissioner Watters said. “We now have reason to believe they may be offering or selling, through their agents, fraudulent securities to Michigan residents and we want to warn the public.”
OFIS is currently investigating Ronald Stein, president of Malory, and Blake William Wilson (also known as Arnold Kramer, Arnold Cramer and Irv Cranberg), owner of Capital Guardian.
“Our office is seeking information from citizens who may have been contacted by Stein, Wilson, or any of their agents,” Watters said. “We urge anyone who has been asked by them to invest money in a similar scheme to contact our office.”
Watters encouraged consumers to perform their own due diligence prior to making any investment by contacting the Securities Section of OFIS toll free at (877) 999-6442. The Securities Section can determine whether a broker-dealer, investment adviser or securities agent is registered and whether they have a disciplinary history. OFIS can also determine whether a particular offering has been registered or notice filed with OFIS.Consumers with any information or questions regarding Malory and Capital Guardian should contact OFIS toll-free at (877) 999-6442.