California Department of Corporations Forbids Unlicensed Investment Advisor Selling Securities to Unsuspecting Investors
Sacramento, November 1, 2004 -- The California Department of Corporations issued a desist and refrain order to a San Francisco based company that has been offering and selling securities without a valid license, the Department announced today. In addition, the Department issued orders to levy administrative penalties, seek refund of customer monies, and require the company and individual to discontinue violating the California law.
The Department revoked Shemano Capital Management's and Gary Shemano's investment adviser certificate on February 15, 2002 for, among other things, failing to maintain accurate and current books and records and failing to pay the investment adviser renewal fee. Following an exam on an affiliated broker-dealer, The Shemano Group, the Department learned that Shemano Capital Management and Gary Shemano continued to operate as an unlicensed investment adviser.
The Department issued further orders to Shemano Capital Management and Gary Shemano levying administrative penalties and ordering them to discontinue violations of the California Corporations Code on October 22, 2004. Shemano Capital Management and Gary Shemano have 30 days after the orders were filed to request an administrative hearing to challenge the orders.
The Department seeks to return funds received by Shemano Capital Management and Gary Shemano to clients and/or investors. The administrative penalties sought below from Shemano Capital Management and Gary Shemano are for the period of 2002 to 2004, the time they operated as an unlicensed investment adviser:
Restitution in the amount of at least $50,952 and interest in the amount of at least $87,253;
Disgorgement of management fees in the amount of at least $7,865; and
Recovery costs, investigative expenses and attorney's fees in the amount of at least $15,000.
The Department of Corporations is California's Investment and Financing Authority. The Department is responsible for the regulation, enforcement and licensing of securities, franchises, off-exchange commodities, investment and financial services, independent escrows, consumer and commercial finance lending and residential mortgage lending. For further information or to obtain a complaint form, please visit the Department's web site at www.corp.ca.gov or call 1-866-ASK-CORP (1-866-275-2677).
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