All information in this report was compiled from public records maintained by the SEC.
The Family Tree and Unregistered Dealings
On March 9, Jason P. Wootten, 37, of Scottsdale, Arizona, entered an Offer of Settlement for an SEC Order. The SEC Complaint alleged Wootten, through his company Family Tree Estate Planning, acted as an unregistered broker or dealer by selling securities of the EquiAlt Funds from October 2016 to February 2020.
According to the Complaint, Wooten sold investors three to five-year term debentures bearing 8% to 10% interest and received a sales commission of 8% of the amount invested by investors. As a result, Wootten earned about $3.7 million in transaction-based commissions for selling the Funds’ securities, raising minimally $32 million from investors.
A judgment permanently enjoins Wootten from future violations and is barred from association with any broker or dealer, and in any offering of a penny stock, or attempting to induce the purchase or sale of any penny stock. In addition, Wootten and Family Tree were found liable, jointly and severally, for disgorgement of $1,105,054, with prejudgment interest of $105,464, and a civil penalty of $150,000.
Veering Off the Straight & Narrow Path
On March 23, the SEC charged sales agents Scott Hollender, Gabriel Migliano, Jr., and Frank Vecchio for selling interests in shares of pre-IPO companies on behalf of StraightPath Venture Partners without being registered broker-dealers and for misleading investors about fees associated with those investments.
The SEC complaint alleges that between November 2017 and November 2022 the three sales agents solicited investments for funds set up as series LLCs with acquired shares of a pre-IPO company, with related marketing materials and advice on the merits of the investments.
According to complaint allegations, the defendants solicited around $13 million in investments from 115 investors. The three received about 10 percent on investments they successfully solicited while falsely telling investors there were no upfront fees. In addition, the trio allegedly received about $3.7 million in translation-based compensation, and an SEC investigation continues.
In May 2022, the SEC previously charged StraightPath Venture Partners, StraghtPath Management LLC, and its four principals in connection with a $410 million fraud. According to Antonia M. Apps, Director of the New York Regional Office, “StraightPath Venture Partners could not have cheated investors without the unregistered sales agents to fraudulently solicit them. The SEC will continue to hold individuals accountable for their wrongdoing, including a failure to register.”
Dicken with Defraud
Today, March 27, Shawn K. Dicken, 49, a former resident of Midland, Michigan, entered an Offer of Settlement for an SEC Order. From November 2010 through June 2012, Dicken was associated with W.R. Rice, an SEC-registered broker-dealer, and from August 2012 through May 2013, Dicken was associated G-W Brokerage Group, an SEC-registered broker-dealer.
A bit of backstory, drawing on SEC records: Nine years ago, on March 13, a jury found Dicken guilty of seven counts of making or using false pretenses to obtain money from a person with the intent to defraud from January 2011 to November 2012. During the trial, several elderly victims testified about offers and sales of investments based on Dicken’s fraudulent statements and activities.
On July 31, 2014, in People v. Shawn Kristi Dicken, Case No. 2013-005531-FH (Cir. Ct., Midland County, Michigan), a criminal judgment was entered, and Dicken was sentenced to 140 months to 20 years in prison.
Now the SEC has barred Dicken from being associated with any broker or dealer, and from participating in any offering of a penny stock, including acting as a finder, consultant, agent, promotor, or finder, along with any disgorgement amounts ordered against her for which the SEC waived payment.
Watch here for more penny stock violations compiled as the SEC reports them.