State assesses $400,000 fine against former Oregon businessman
(Salem) – The Oregon Department of Consumer and Business Services (DCBS) has ordered a Mill Creek, Wash., man to stop violating Oregon securities laws and imposed a $400,000 civil penalty against him and his company for selling unlicensed and unregistered securities to Oregon consumers.
For approximately two years ending in May 2009, Cecil F. “Buz” Smith Jr., through True North Productions, LLC, obtained $205,000 from 10 Oregon investors to establish a tourism business offering bus tours of the Oregon Columbia River Gorge to senior citizens. Smith promised the investors an 8 percent to 20 percent return on their investments. To date, no Oregon investor has received the promised return on their investment or a return of their principal investment.
In addition to selling unregistered securities, Smith is not licensed to sell securities in Oregon and failed to mention to the investors that their funds would be used by Smith for personal purposes, including gym membership fees, rent for Smith’s personal residence, and payments to Smith’s wife. He also failed to disclose that he previously filed for bankruptcy.
Smith was the subject of a previous DCBS enforcement action for illegally selling securities and securities fraud. Between January 2003 and October 2004, Smith obtained more than $264,000 from 22 Oregon investors for Church Ministries Distribution, Inc. (CMD). Ultimately, DCBS ordered Smith and CMD to pay a $440,000 fine for the violations.
“Both of these cases illustrate how important it is for investors to do research before committing their hard-earned money,” said David Tatman, administrator for the department’s Division of Finance and Corporate Securities. “Investors can easily check and verify information by contacting our office or going online.”
The division has information on licensing, registration, and enforcement history on individuals, companies, and securities products through its toll-free number: 1-866-814-9710 and its website: :http//www.dfcs.oregon.gov/securities.html.
Here’s a link to the final order: http://www.cbs.state.or.us/external/dfcs/securities/enf/orders/S-12-0076.pdf.
The Division of Finance and Corporate Securities helps ensure that a wide range of financial products and services are available to Oregonians and protects consumers from financial fraud and abuse. It does that by licensing financial institutions and service providers, regulating the sale of securities in Oregon, investigating complaints and alleged violations of financial-service laws, and providing education and other resources to consumers.
Director’s Office, 350 Winter St. NE, Room 200, Salem, Oregon 97301-3878
The Department of Consumer and Business Services is Oregon’s largest business regulatory and consumer protection agency. For more information, visit www.dcbs.oregon.gov.