UNITED STATES OF AMERICA
In the Matter of
JOHN MARTIN CARLSON
| ORDER INSTITUTING
FINDINGS AND IMPOSING
The Securities and Exchange Commission (Commission) deems it appropriate and in the public interest that public administrative proceedings be and hereby are instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act) against John Martin Carlson (Carlson) and Carlson National Brokers, Ltd. (CNB) and, with respect to Carlson, also be instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940.
In anticipation of the institution of these proceedings, Carlson and CNB have submitted an Offer of Settlement to the Commission that the Commission has determined to accept. Solely for the purposes of these proceedings and any other proceedings brought by or on behalf of the Commission or in which the Commission is a party and without admitting or denying the findings contained herein, except as to entry of the injunction described below and the Commission's jurisdiction over them and over the subject matter of this proceeding, which are admitted, Carlson and CNB consent to the institution of public administrative proceedings, and the findings and remedial sanctions set forth below.
On the basis of this Order and the Offer of Settlement submitted by Carlson and CNB, the Commission finds that:
A. Carlson, age 55, is a resident of Naples, Florida. Carlson is an owner and the managing director of Tradewinds Holdings, LLC (Tradewinds), Peak Holdings, LLC (Peak), and Harbor Holdings, LLC (Harbor). He owns and is an associated person of Carlson National Brokers, Ltd. (CNB).
B. Since February 1992, CNB has been registered with the Commission as a broker-dealer. CNB was also registered with the Commission as an investment adviser until August 1998 and is currently registered with the state of Illinois as an investment adviser.
C. On October 15, 1999, the Commission filed a Complaint in the United States District Court for the Southern District of New York against Michael Gause (Gause), Charles R. Homa (Homa) and various other individuals, captioned SEC v. Charles Richard Homa, et al. On October 18, 1999, the action was transferred to the Northern District of Illinois and assigned case number 99 C 6895. On June 1, 2000, the Commission filed its Amended Complaint that included charges against Carlson and CNB.
D. The Commission's Amended Complaint alleges that from 1996 through October 1999, Carlson, CNB and other defendants violated the federal securities laws by fraudulently engaging in a $314 million Ponzi scheme involving at least 1000 investors. The Amended Complaint alleges that Carlson and CNB, as part of an extensive sales network developed by Homa and Gause, offered and sold securities, in the form of promissory notes and bonds issued by, among others, Tradewinds, Peak, and Harbor, which purported to provide returns through investments in the car title and payday loan business. The Amended Complaint alleges Carlson and CNB raised $5.6 million from investors. Further, the Amended Complaint alleges that the investment funds were not used in the car title or payday loan business, but rather were used to make interest payments to existing investors, to pay marketer commissions, and for personal expenditures of Homa and Gause. The Amended Complaint alleges that Carlson, CNB and other defendants made misrepresentations and omissions of material fact concerning the use of investor funds and failed to disclose the source of the interest payments and that the notes and receivables purportedly securing certain offerings were insufficient security.
E. On January 12, 2001, in SEC v. Homa, the Honorable Ronald A. Guzman entered an order enjoining Carlson and CNB from violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(c) of the Exchange Act and Rules 10b-5 and 15c1-2 promulgated thereunder. Carlson and CNB, without admitting or denying the allegations in the Complaint, consented to Judge Guzman's Order.
In view of the foregoing, the Commission deems it appropriate and in the public interest to accept the Offer of Settlement of John Martin Carlson and Carlson National Brokers, Ltd.
Accordingly, IT IS ORDERED that Respondent John Martin Carlson is barred from association with any broker or dealer or investment adviser.
IT IS FURTHER ORDERED that Respondent Carlson National Brokers, Ltd.'s registration with the Commission as a broker-dealer is hereby revoked.
By the Commission.
Jonathan G. Katz
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