U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21560 / June 17, 2010
SEC v. Martin T. Wegener et al., Case No. 1:10-CV-566 (W.D. Mich., filed June 14, 2010).
The Securities and Exchange Commission (Commission) announced that on June 14, 2010, it filed a civil injunctive action against Martin T. Wegener (Wegener), a resident of Grand Rapids, Michigan, and two companies formed, owned, and controlled by Wegener, Wealth Resources, Inc. and Wealth Resources, LLC (collectively, Wealth Resources), for fraudulently offering and selling at least $6.5 million in securities.
In the complaint, filed in the United States District Court for the Western District of Michigan, the Commission alleges that, from at least 2007 to March 2010, Wegener, who, along with Wealth Resources, acted as an unregistered broker and investment adviser, raised at least $6.5 million from at least twenty investors by falsely representing that he would invest their funds in securities through Wealth Resources. The complaint further alleges that after he received the customers' funds, Wegener gave them purported "brokerage account" statements from Wealth Resources that falsely represented that he invested the money in a variety of investments, including publicly traded securities, publicly traded mutual funds, two private companies in which Wegener had an ownership interest, other private companies, and other "funds." According to the complaint, in reality, Wegener did not use the customers' money to purchase the investments as represented. Instead, Wegener used the customers' money (1) for personal expenses, (2) to pay business expenses for and make investments on his own behalf in entities in which he held an ownership interest, including WU Ventures, LLC, Secura Technology, LLC, and Trailblazer Learning, Inc., as well as Wealth Resources itself; and (3) to make Ponzi-like payments to other customers who requested a return of all or part of their investment. The complaint names WU Ventures, LLC, Secura Technology, LLC, and Trailblazer Learning, Inc. as relief defendants, along with Kristin A. Wegener, Wegener's former wife, to whom he also transferred investor funds.
Without admitting or denying the allegations in the SEC's complaint, Wegener and Wealth Resources consented to the entry of orders of permanent injunction enjoining them from violations of Section 17(a) of the Securities Act of 1933; Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder; Section 15(a) of the Exchange Act; and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The proposed orders further provide that the Court shall order disgorgement of ill-gotten gains and prejudgment interest thereon, and that the amounts of the disgorgement as well as a civil penalty against Wegener, shall be determined by the Court upon motion of the Commission. The orders are subject to the approval of the Court. The Complaint also seeks disgorgement of ill-gotten gains from the relief defendants.
See Also: SEC Complaint