In the Matter of Foundations Asset Management, LLC, et al. Admin. Proc. File No. 3-19266

On July 24, 2019, the Commission instituted and simultaneously settled administrative and cease-and-desist proceedings (the “Order”) against Foundations Asset Management, LLC, Michael W. Shamburger, and Rob E. Wedel (collectively, the “Respondents”). In the Order, the Commission found that conflicts of interest that were not properly disclosed and that broker-dealer registration violations were committed by registered investment adviser FAM and its two principals, Shamburger and Wedel. In the Order, the Commission found that from May 2013 through June 2016, FAM improperly received approximately $254,000 in compensation from private real estate fund Alaska Financial Company III LLC (“AFC III”) and AFC III’s manager McKinley Mortgage Co. LLC, while acting as an unregistered broker. In total, the Commission ordered the Respondents to pay $253,784.00 in disgorgement, $25,163.00 in prejudgment interest, and $160,000.00 in civil money penalties, of which $114,000 of the disgorgement was deemed satisfied by the undertaking contained in paragraph 30 of the Order for a total of $324,947.00, to the Commission. The Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties paid, along with the disgorgement and interest paid, can be distributed to harmed investors (the “Fair Fund”). See the Commission’s Order: Release No. 34-86446. 

The Fair Fund includes the $324,947.00 paid by the Respondents. The Fair Fund and has been deposited in an interest-bearing account at the U.S. Department of the Treasury’s Bureau of the Fiscal Service, and any interest accrued will be added to the Fair Fund.

On May 9, 2022, the Commission published a notice of the proposed plan of distribution and opportunity for comment and simultaneously published the proposed plan of distribution (“Proposed Plan”). The Proposed Plan proposes Allison Moon, a Commission employee, serve as the Fund Administrator to oversee the administration and distribution of the Fair Fund. The notice provides the public with 30 days to submit their comments on the Proposed Plan. See the Commission’s Notice: Release No. 34-94877 and the Proposed Plan.

The Proposed Plan provides that the distribution of the Fair Fund shall be made to those investors in AFC III promissory notes from May 3, 2013 to June 30, 2016 and who suffered a recognized loss as calculated by the methodology used in the plan of allocation in the Proposed Plan.

On July 12, 2022, the Commission issued an order approving the Proposed Plan and simultaneously posted the approved plan of distribution (the “Plan”). See the Commission’s Order:  Release No. 34-95255 and the Plan.

On March 1, 2023, the Commission issued an order approving the disbursement of $298,273.61 from the Fair Fund for distribution to eligible investors.  See the Commission’s Order: Release No. 34-97000.

For more information, please contact the Commission:

Office of Distributions
Email: ENFOfficeofDistributions@sec.gov