UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MINNESOTA

COMPLAINT

Plaintiff, United States Securities and Exchange Commission ("Commission"), alleges as follows:

NATURE OF THE COMPLAINT

1. During the period of September 1998 through December 1999, George Kline ("Kline") tipped Robert Arneson ("Arneson"), his personal banker at Ridgedale State Bank ("Ridgedale Bank"), with material, nonpublic information regarding several publicly traded companies. Specifically, through Kline's position on the board of directors of Stockwalk.com ("Stockwalk") or through information provided by Robert Hibbs ("Hibbs"), Kline obtained material, nonpublic information about Stockwalk and Tower Automotive, Inc. ("Tower"), which he passed on to Arneson. While in possession of that information, Arneson purchased shares in Kinnard Investments, Inc. ("Kinnard") and Tower based on Kline's recommendation shortly before a material public announcement by each corporation. In each case, Arneson sold his shares shortly after the public announcement.

2. By engaging in these transactions, Arneson knowingly or recklessly engaged in insider trading violations that resulted in profits of approximately $15,094.

3. In addition, during the period December 1995 through February 2000, Ridgedale Bank and Arneson approved loans in the amount of $500,000 to a corporation controlled by Kline, Protective Mouthguard, Inc. ("PMI"). Kline used these funds to purchase stock anonymously by using an account in the name of PMI rather than his own name. At the time Ridgedale Bank made these loans, Arneson and Ridgedale Bank knew or had reason to know that the purpose of PMI was to avoid corporate insider reporting requirements. These loans generated approximately $65,582 in interest for the bank.

4. On July 3, 2001 the United States District Court for the District of Minnesota accepted Kline's plea of guilty to multiple counts including one count of conspiracy to commit securities fraud and mail fraud, two counts of securities fraud, two counts of mail fraud, and one count of engaging in a prohibited short sale of securities in violation of 18 U.S.C. §371, 15 U.S.C. §78j(b) and 78ff(a), 18 U.S.C. §1341 and 15 U.S.C. §78p(c) and 78ff(a), as well as one count of engaging in a monetary transaction in property derived from specified unlawful activity in violation of 18 U.S.C. §1957.

5. In August, 2001 the United States District Court for the District of Minnesota accepted Hibb's plea of guilty to multiple counts including tax evasion and securities fraud in violation of 15 U.S.C. §78j(b) and 78ff(a), 17 C.F.R. §240.10b-5 and 26 U.S.C. §7201.

6. Defendant Arneson, directly and indirectly, has engaged in and, unless enjoined, will continue to engage in acts, practices and courses of business which constitute and will constitute violations of Sections 10(b) and 16(a) of the Securities Exchange Act of 1934 ("the Exchange Act") [15 U.S.C. §78j(b), 78(p)(a)] and Rules 10b-5 and 16a-3 [17 C.F.R. §240.10b-5 and 240.16a-3] promulgated thereunder.

7. Defendant Ridgedale Bank, directly and indirectly, has engaged in and, unless enjoined, will continue to engage in acts, practices and courses of business which constitute and will constitute violations of Section 16(a) of the Exchange Act [15 U.S.C. §78(p)(a)] and Rule 16a-3 [17 C.F.R. §240.16a-3] promulgated thereunder.

JURISDICTION

8. The court has jurisdiction over this action pursuant to Sections 21 and 27 of the Exchange Act [15 U.S.C. §78u and 78aa].

9. The acts, practices and courses of business constituting the violations herein occurred within the jurisdiction of the United States District Court of the District of Minnesota and elsewhere.

10. The Defendants will, directly and indirectly, unless enjoined, have the opportunity to engage in the acts, practices and courses of business set forth in this complaint and in acts, practices and courses of business of similar purport and object.

11. The Defendants, directly and indirectly, have made use of the mails and of the means and instrumentalities of interstate commerce in connection with the acts, practices and courses of business alleged herein in the District of Minnesota and elsewhere.

DEFENDANTS

12. Robert Arneson, age 57, resides in Excelsior, Minnesota. He has served as the President of Ridgedale State Bank in Minnetonka, Minnesota from 1986 through the present. In his position as president of Ridgedale State Bank, Arneson acted as the personal banker for George E. Kline.

13.Ridgedale State Bank, located in Minnetonka, Minnesota, was founded in 1978. The Bank's stock is not publicly traded. It had total assets of approximately $90,932,000 as of December 31, 2000. During the period from December 1995 through February 2000, the bank approved loans in the amount of $500,000 to PMI, a company owned and operated by Kline. These loans generated approximately $65,582 in interest for the bank.

FACTS

Background

14. On July 3, 2001 the United States District Court for the District of Minnesota accepted Kline's plea of guilty to multiple counts including one count of conspiracy to commit securities fraud and mail fraud, two counts of securities fraud, two counts of mail fraud, and one count of engaging in a prohibited short sale of securities.

15. In his plea agreement, Kline admitted that from approximately January 1997 through December 1999, he periodically exchanged inside information with Hibbs. Hibbs provided Kline with material, nonpublic information for certain corporations including Tower and Excel.

16. Kline further admitted that he occasionally passed along the information provided by Hibbs, and other inside information, to his banker at Ridgedale Bank, Arneson.

17. Kline also admitted that he used his PMI account to anonymously purchase stock in corporations in which he served as an officer or director. By doing so he avoided the necessary reporting requirements. Kline also admitted that, through the use of his PMI account, he engaged in a short sale of a corporation in which he served as a director.

Arneson's Trading Activity

I. The Kinnard Trade

18. Sometime prior to the close of the market on December 6, 1999, Arneson received a tip from Kline to purchase Kinnard. This tip was based on material, nonpublic information Kline obtained through his position as a director at Stockwalk. Unknown publicly at the time, Stockwalk was in the process of making a tender offer for Kinnard.

19. Kline knew or had reason to know that the information was nonpublic and that it was improper to communicate it to Arneson.

20. On December 6, 1999, Arneson purchased 5,000 shares of Kinnard stock while in possession of the material, nonpublic information he received from Kline.

21. On December 6, 1999, after the close of the market, Stockwalk announced a tender offer bid for Kinnard. Kinnard stock closed on December 6, 1999 at approximately $5.75 and opened on December 7, 1999 at approximately $7.50, an increase of approximately $1.75 or 30%.

22. On December 7, 1999, after the public announcement, Arneson sold his shares of Kinnard for approximately $7.36 per share, realizing a profit of approximately $7,564.

II. The Tower Trade

23. Prior to September 24, 1998, Arneson received a recommendation from Kline to purchase Tower stock. This recommendation was based on material, nonpublic information provided to Kline by Hibbs, who served as an officer of Tower.

24. Kline knew that the information was nonpublic and that it was improper to communicate it to Arneson.

25. While in possession of the material, nonpublic information received from Kline, Arneson purchased 5,000 shares of Tower stock on September 22, 1998.

26. On September 24, 1998, Tower announced that it expected to report higher third-quarter earnings, approximately 10% above analysts' estimates. On September 23, 1998, prior to the announcement, Tower stock closed at approximately $16.38 per share. On September 25, 1998, after the announcement, Tower stock closed at approximately $19 per share, an increase of $2.62 or approximately 16%.

27. On September 25, 1998, after the public announcement, Arneson sold 5,000 Tower shares for approximately $18.98 per share, realizing a profit of approximately $7,530.

Aiding and Abetting George Kline's Reporting Violations

28. Kline maintained an account at Ridgedale Bank for PMI, a company owned and operated by Kline. Kline admitted using PMI to conceal his illegal trading.

29. Kline admitted that he knew he was required to report transactions of securities in corporations where he served as an officer or director. Kline admitted he knowingly and intentionally devised a scheme to conceal his trading through the use of PMI and failed to report required transactions.

30. During the period from December 1995 through February 2000, Ridgedale Bank approved loans totaling $500,000 to PMI.

31. Ridgedale Bank approved two principal loans to PMI. The first loan was approved on December 7, 1995, in the amount of $100,000. Ridgedale Bank approved a second loan to PMI on November 6, 1997, in the amount of $400,000. Both loans were refinanced on several occasions.

32. Kline communicated to Arneson and Ridgedale Bank that he wanted to use PMI to avoid reporting requirements. Thus, Arneson and Ridgedale Bank knew or had reason to know that the purpose of PMI was to avoid corporate insider reporting requirements. In addition, Arneson and Ridgedale Bank knew or had reason to know that Kline used the loan proceeds to purchase stock anonymously by using an account in the name of PMI rather than his own name.

33. Kline used the funds from these loans to purchase stock through PMI in corporations where he was required to report his securities transactions. These loans generated approximately $65,582 in interest for the bank.

COUNT I

Violations of Section 10(b) of the
Exchange Act [15 U.S.C. §78j(b)]
and Rule 10b-5 [17 C.F.R. §240.10b-5] Promulgated thereunder

34. Paragraphs 1 through 33 are hereby realleged and incorporated by reference herein.

35. For the period of September, 1998 though December, 1999, Defendant Arneson, in connection with the purchase and sale of securities, by use of the means or instrumentalities of interstate commerce or of the mails, directly or indirectly: employed devices, schemes and artifices to defraud; made untrue statements of material fact or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; or engaged in acts, practices and courses of businesses which operated as a fraud and deceit upon purchasers and sellers of such securities.

36. As part of his conduct, and as more fully set forth in paragraph 34 and 35 above, Defendant Arneson purchased and sold securities while in possession of material, nonpublic information.

37. Defendant Arneson knew or had reason to know the facts and circumstances described in paragraphs 34 through 36 above.

38. As a result of the activities described in paragraphs 34 through 37 above, Defendant Arneson violated Section 10(b) of the Exchange Act [15 U.S.C. §78(b) and Rule 10b-5 [17 C.F.R. §240.10b-5] promulgated thereunder.

COUNT II

Defendants Arneson and Ridgedale Bank
Aided and Abetted Kline's Violations
of Section 16(a) of the Exchange Act
[15 U.S.C. §78p(a)] and Rule 16a-3 [17 C.F.R. §240.16a-3] thereunder

39. Section 16(a) and Rule 16a-3 of the Exchange Act require directors and officers, and persons who own more than 10% of a registered class of a company's equity securities, to file reports of ownership and changes of ownership with the Commission. Any person who becomes subject to this requirement must file an initial report on Form 3 within 10 days of acquiring that status. Once the initial report is filed, any changes in holdings must be reported on Form 4 by the 10th day of the month following the change. An annual report on Form 5 must be filed on or before the 45th day after the end of the issuer's fiscal year.

40. As set forth above in paragraphs 1 through 39, Kline failed to report transactions in securities in violation of Section 16(a) of the Exchange Act and Rule 16a-3 [15 U.S.C. §78p(a)] and Rule 16a-3 [17 C.F.R. §240.16a-3] promulgated thereunder.

41. Kline used the proceeds of the loans issued to PMI to trade stock in such a way as to illegally avoid his reporting requirements. Arneson and Ridgedale Bank knew or had reason to know that Kline was using the proceeds of the loans to PMI to illegally avoid insider reporting requirements.

42. As a result of the activities described in paragraphs 39 through 41, Arneson and Ridgedale Bank aided and abetted Kline's violations of Section 16(a) of the Exchange Act [15 U.S.C. §78p(a)] and Rule 16a-3 [17 C.F.R. §240.16a-3] promulgated thereunder.

RELIEF REQUESTED

WHEREFORE, the Commission requests that the Court:

I.

Find that the Defendants Arneson and Ridgedale Bank committed the violations alleged above.

II.

Grant a Final Judgment and an order of permanent injunction ("Final Judgment"), in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, enjoining Arneson, his officers, agents, servants, employees, assigns, attorneys and those persons in active concert or participations with him who receive actual notice of the Final Judgment by personal service or otherwise, and each of them, from, directly or indirectly, as principals or aiders and abettors, by the use of the mails or any means or instrumentality of interstate commerce, engaging in the unlawful acts, practices and courses of business described above, or any conduct of similar purport or object, in connection with the transactions in the securities described in this complaint or any other security, including violations of Sections 10(b) and 16(a) of the Exchange Act [15 U.S.C. §78j(b) and 78(p)(a)] and Rules 10b-5 and 16a-3 promulgated thereunder [17 C.F.R. §240.10b-5 and 240.16a-3].

III.

Grant a Final Judgment and an order of permanent injunction ("Final Judgment"), in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, enjoining Ridgedale Bank, its officers, agents, servants, employees, assigns, attorneys and those persons in active concert or participations with it who receive actual notice of the Final Judgment by personal service or otherwise, and each of them, from, directly or indirectly, as principals or aiders and abettors, by the use of the mails or any means or instrumentality of interstate commerce, engaging in the unlawful acts, practices and courses of business described above, or any conduct of similar purport or object, in connection with the transactions in the securities described in this complaint or any other security, including violations of Section 16(a) of the Exchange Act [15 U.S.C. §78(p)(a)] and Rule 16a-3 promulgated thereunder [17 C.F.R. §240.16a-3].

IV.

Retain jurisdiction of this action in accordance with the principles of equity and the Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that may be entered or to entertain any suitable application or motion for additional relief within the jurisdiction of this Court.

V.

Grant an Order for such further relief as the Court may deem appropriate.