U.S. SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 21742 / November 15, 2010

Securities and Exchange Commission v. Integrity Financial AZ, LLC, Steven R. Long, Stanley M. Paulic, Walter W. Knitter, and Robert C. Koeller, Civil Action No. 10-CV-782 (SO) (N.D. Ohio, filed Apr. 15, 2010)

SEC SETTLES FRAUD AND REGISTRATION CHARGES AGAINST CHICAGO PROMOTER

The U.S. Securities and Exchange Commission ("Commission") today announced that, on October 29, 2010, the U.S. District Court for the Northern District of Ohio entered a settled Final Judgment as to Defendant Walter W. Knitter, in the previously-filed fraudulent unregistered offering action, Securities and Exchange Commission v. Integrity Financial AZ, LLC, Steven R. Long, Stanley M. Paulic, Walter W. Knitter, and Robert C. Koeller, Civil Action No. 10-CV-782 (SO) (N.D. Ohio, filed Apr. 15, 2010).

The Commission's complaint alleged that Knitter, who is based in Chicago and who was working for Integrity Financial AZ, LLC, promoted an unregistered offering of securities in the form of promissory notes purportedly secured by real estate in Arizona. The complaint further alleged that Knitter and the other defendants made multiple fraudulent misrepresentations regarding the safety of the investment, including telling prospective investors that 100% of investor funds would be used to build houses in Tonopah, Arizona and that the investment was "FDIC insured."

Knitter consented to the entry of the Final Judgment against him, without admitting or denying the allegations in the Commission's complaint, except as to jurisdiction. The Final Judgment against Knitter permanently enjoins him from further violations of Sections 5 and 17(a) of the Securities Act of 1933, and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b 5 thereunder. The Final Judgment further finds Knitter liable for disgorgement in the amount of $105,595, plus prejudgment interest in the amount of $5,481, but waives payment of all but $24,400 of the disgorgement and prejudgment interest, based on Knitter's sworn representations in his Statement of Financial Condition and other documents and information submitted to the Commission.

See also Litigation Release No. 21488 (April 15, 2010).

 
http://www.sec.gov/litigation/litreleases/2010/lr21742.htm

Last modified: 11/15/2010