In the Matter of Kenneth C. Meissner, et al.
Admin. Proc. File No. 3-16175
On September 25, 2014, the Commission instituted cease-and-desist proceedings against Kenneth C. Meissner (“Meissner”), James Doug Scott (“Scott”), and Mark S. “Mike” Tomich (“Tomich”) (collectively, the “Respondents”). The Commission alleged that, from August 2011 to January 2013, the Respondents violated the federal securities laws by effecting transactions as unregistered brokers, on behalf of Gary Snisky (“Snisky”), through the sale of membership interests in Arete, LLC and other companies controlled by Snisky. The Respondents raised more than $1.47 million from investors to invest with Snisky based on false promises and received more than $87,000 in commissions. See the Commission’s order: Release No. 34-73226.
On December 23, 2014, the Commission accepted Tomich’s settlement offer and issued an order requiring Tomich to pay disgorgement of $48,327.00, prejudgment interest of $2,976.87, and a civil penalty of $48,000.00. The funds were ordered to be held pending a decision whether the Commission, in its discretion, will seek to distribute the funds, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, as amended, or transfer the funds to the U.S. Treasury. See Commission’s order: Release No. 34-73925.
An Administrative Law Judge (“ALJ”) adjudicated the allegations against Meissner and Scott and issued an Initial Decision on April 7, 2015 and August 4, 2015, respectively. The ALJ ordered Meissner to disgorge $19,268.70, and ordered Scott to disgorge $26,297.84 and pay prejudgment interest of $2,294.22 and a civil penalty of $15,000.00. By orders issued on May 20, 2015 and September 28, 2015, respectively, the Initial Decisions became final and effective. See the Commission’s orders: Release Nos. 34-75005 and 34-76001.
On December 9, 2016, the Commission issued an order appointing Damasco & Associates LLP (“Damasco”) as the Tax Administrator of the Fair Fund. Damasco was acquired by Miller Kaplan Arase LLP and on June 30, 2017, the Commission issued a notice of name change for the Tax Administrator.
On August 14, 2017, the Commission issued an Order establishing a fair fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002 (the “Fair Fund”) for the disgorgement, prejudgment interest, and penalty funds collected, and to be collected from the Respondents. See the Commission’s order: Release No. 34-81385.
On August 21, 2017, the Commission issued 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 proposed Catherine E. Pappas, a Commission employee, 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: See the Commission’s notice: Release No. 34-81449, and the Proposed Plan.
The Proposed Plan proposes to transfer all funds currently in the Fair Fund, and additional funds collected from the Respondents, less any outstanding taxes and expenses, to the Court Registry Investment System account established in the related criminal action, United States v. Snisky, No.13-cr-00473-RM (D. Colo.) (the “Criminal Action”), for distribution to harmed investors in accordance with the restitution process in the Criminal Action.
On September 25, 2017, the Commission issued an order approving the plan of distribution and authorizing the transfer of the Fair Fund funds. The Commission also published the approved plan of distribution (“Plan”). See the Commission’s order: Release No. 34-81696, and the Plan.
For more information, please contact the Fund Administrator:
Catherine E. Pappas
Securities and Exchange Commission
Telephone Number: 215-597-0657