UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF PENNSYLVANIA

COMPLAINT

Plaintiff Securities and Exchange Commission ( the "Commission") alleges as follows:

SUMMARY

1. The matter involves two distinct fraudulent offerings of unregistered nine-month promissory notes, where investors were promised secure investments with 12% (or more) annual returns, and instead lost all or the vast majority of their money.

2. Defendants Security Asset Capital Corporation, Darrell G. Musick, David S. Walton, Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., Gary J. Spirk, Apacor Financial, Inc., and Richard C. Wallace falsely represented how the note proceeds were to be used and the nature of the investment risk.

3. In its offering, Security Asset Capital Corporation ("Security Asset") raised approximately $ 7 million from December 1998 through January 2001, while Apacor Financial, Inc. ("Apacor") raised approximately $1.5 million from August 2000 through March 2001.

4. Both Security Asset and Apacor were in the debt service business -- buying portfolios of distressed consumer debt for resale or refinancing, and both sold their notes through a common network of independent insurance agents. In addition, defendants Arthur B. Carlson, III ("Carlson"), Secure Investments, Inc. ("Secure Investments"), and Gary J. Spirk ("Spirk") were involved in both fraudulent offerings.

5. The misconduct in both offerings was essentially the same. In both unregistered offerings, the defendants violated the antifraud provisions of the federal securities laws by affirmatively misrepresenting the anticipated use of the offering proceeds and the risks associated with the investments. In both offerings, the defendants stated that investor funds would be used to purchase consumer debt portfolios and pay costs associated with the notes. In fact, the majority of the proceeds were used to pay salaries and commissions to the principals and salespeople, to pay personal expenses of the principals, and to pay prior investors.

6. The issuers and their respective principals also falsely stated that the notes were secure - "not risky" - investments guaranteed by the issuing company. The sales agents fraudulently repeated, and sometimes embellished, these material misrepresentations directly to investors.

7. No registration statement was in effect as to these promissory notes; nor were they exempt from registration. Moreover, the promissory notes were sold by persons who were not registered with the Commission as broker or dealers.

8. By knowingly or recklessly engaging in the conduct described in this Complaint, defendants Security Asset Capital Corporation, Darrell G. Musick, David S. Walton, Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., Gary J. Spirk, Apacor Financial, Inc., and Richard C. Wallace have violated, and unless restrained and enjoined will continue to violate, Section 17(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. § 77q(a); Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § 78j(b); and Rule 10b-5, 17 CFR § 240.10b-5, thereunder.

9. By engaging in the conduct described in this Complaint, defendants Security Asset Capital Corporation, Darrell G. Musick, Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., Gary J. Spirk, Apacor Financial, Inc., and Richard C. Wallace have violated, and unless restrained and enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77(e)(a) and (c).

10. By engaging in the conduct described in this Complaint, defendants Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., and Gary J. Spirk, have violated, and unless restrained and enjoined will continue to violate, Section 15(a)(1) of the Exchange Act, 15 U.S.C. § 78o(a)(1).

JURISDICTION AND VENUE

11. The Commission brings this action pursuant to Sections 20(b) and (d) of the Securities Act, 15 U.S.C. § 77t(b) and (d), and Sections 21(d) and (e) of the Exchange Act, 15 U.S.C. §§ 78u(d) and (e), to enjoin such acts, transactions, practices and courses of business, obtain disgorgement and civil penalties, and for other appropriate relief.

12. This Court has jurisdiction over this action pursuant to Section 22(a) of the Securities Act, 15 U.S.C. § 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. § 78aa.

13. Certain of the acts, transactions, practices and courses of business constituting the violations alleged herein occurred within the Eastern District of Pennsylvania and elsewhere, and were effected, directly or indirectly, by making use of the means and instruments of transportation or communication in interstate commerce, or the means and instrumentalities of interstate commerce, or the mails, or the facilities of a national securities exchange.

DEFENDANTS

14. Security Asset Capital Corporation ("Security Asset"), a Nevada corporation headquartered in San Diego, California, is the successor name of Universal View Corporation, a shell company which Security Asset acquired in a reverse merger on April 4, 2000. On April 5, 2000, Security Asset filed its Form 8-K to report the change in control of the registrant. Until it was de-listed on September 28, 2003, Security Asset's common stock was quoted on the NASDAQ Bulletin Board. The company filed a Form 15, pursuant to Rule 12g-4(a)(1)(ii), to terminate its Section 12(g) registration. Security Asset was originally in the business of buying discounted debt portfolios, which the company would either collect or resell at a profit. In late 1999 or early 2000, Security Asset began to shift its business from buying/selling debt portfolios to developing technological applications to serve the debt industry.

15. Darrell G. Musick ("Musick"), age 66, lives in Oceanside, California, and was involved in the Security Asset offering. Since 1993, he has been the President and a director of Security Asset. Musick was also a member of Security Asset's audit committee.

16. David S. Walton ("Walton Sr."), age 73, lives in the area of San Diego, California, and was involved in the Security Asset offering. Walton Sr. has served as the Secretary, Treasurer, internal auditor and a Director of Security Asset since 1996.

17. Richard E. Wensel ("Wensel"), age 69, lives in Scottsdale, Arizona, and was involved in the Security Asset offering. In or around March 2001, Wensel became a director of Security Asset. According to Security Asset's Form 10KSB filing for the year ending December 31, 2001, Wensel resigned from his director position effective December 20, 2001 but continued to serve as an executive vice president of one of Security Asset's subsidiaries. Wensel was also a defendant in another Commission action involving a "pump and dump" scheme, wherein he consented to the entry of an injunction enjoining him from further violations of the anti-fraud provisions of the federal securities laws. SEC v. Robert D. Poirer, et al., Civil Action No. 96-2243-PHX-EHC (D. Az., filed Sept. 30, 1996). He has never been registered with the Commission as a broker or dealer.

18. Continental Capital Group, Ltd. ("Continental Capital"), is a Delaware Corporation headquartered located in Edina, Minnesota, and was involved in the Security Asset and offering. Defendant Arthur B. Carlson, III, established Continental Capital for the stated purpose of helping parties secure financing through bank loans, private placements, and public registrations. Continental Capital has never been registered with the Commission as a broker or dealer.

19. Arthur B. Carlson, III ("Carlson"), age 52, lives in St. Paul, Minnesota, and was involved in both the Security Asset and Apacor offerings. At all relevant times, Carlson was Chief Executive Officer ("CEO") and majority shareholder of Continental Capital. Carlson also served as the Chief Financial Officer ("CFO") of defendant, Apacor Financial, Inc. In addition, Carlson was a licensed certified public accountant ("CPA") in Minnesota from 1977 through 2000. Currently, Carlson is the CEO and CFO of Advanced Capital Advisers, Inc. ("Advanced Capital"), which is located in Minneapolis, Minnesota, and has been registered with the Commission as an investment adviser since February 22, 2002. Carlson has never been registered with the Commission as a broker or dealer.

20. Secure Investments, Inc. ("Secure Investments"), is a Pennsylvania corporation headquartered in Mountville, Pennsylvania, and was involved in both the Security Asset and Apacor offerings. Defendant Gary J. Spirk formed Secure Investments in order to market promissory notes. Secure Investments has never been registered with the Commission as a broker or dealer.

21. Gary J. Spirk ("Spirk"), age 50, lives in Washington Boro, Pennsylvania, and was involved in both the Security Asset and Apacor offerings. Spirk was the sole principal of Secure Investments and was formerly an officer of Lancaster Annuity Services and American Benefits Group. Spirk was the subject of an August 10, 2001 cease-and-desist order issued by the Wisconsin Division of Securities for selling Lancaster Annuity Services promissory notes during the period 1998 and 1999, thereby making him a recidivist. Spirk maintains an insurance license in Pennsylvania. At some prior time, Spirk also maintained insurance licenses in Maryland and Florida. He has never been registered with the Commission in any capacity.

22. Apacor Financial, Inc. ("Apacor"), a Minnesota corporation headquartered in Edina, Minnesota, is a finance company whose primary business is the refinancing of delinquent credit card debt. Apacor is one of a group of finance-related companies owned, in whole or in part, by defendant Richard C. Wallace.

23. Richard C. Wallace ("Wallace"), age 48, was involved in the Apacor offering. He is currently serving a three-year prison sentence at the Federal Correctional Institute in Elkton, Ohio, stemming from his guilty plea in December 2002 to charges of mail fraud and bank fraud relating to the sale of Apacor's promissory notes. Wallace was the majority shareholder of Apacor.

THE DEFENDANTS' FRAUDULENT CONDUCT

24. At all times material hereto, defendant Security Asset acted by and through defendants Walton Sr., Musick, Wensel, Spirk, Secure Investments, Carlson and Continental Capital.

25. At all times material hereto, defendant Apacor acted by and through defendants Wallace, Carlson, Spirk and Secure Investments.

A. The Security Asset Offering

26. From December 1998 through January 2001, Security Asset, through its principals and agents (Musick; Walton Jr.; Walton Sr.; Wensel; Spirk, though Secure Investments; and Carlson, through Continental Capital), raised approximately $7 million from the offer and sale of nine-month unregistered promissory notes to several hundred investors in Pennsylvania, Florida, and California. These investors have lost all or most of their money.

27. Security Asset's offering materials included a brochure, the promissory note and a security agreement. The brochure generally described Security Asset, the profit potential of the debt liquidation industry, and the existence of promissory notes. The promissory note set forth the investment amount and terms, including a 12% annual return and a maturity date of nine months. The security agreement detailed the specific representations and warranties of the investment including, among other things, the quality of the debt purchased, the minimum amount of the debt purchased, and the intended use of the proceeds from sale of the note. The offering materials did not contain financial statements or other detailed financial information and did not discuss any of the investment risks, including Security Asset's precarious financial condition. These offering materials were mailed to investors, who sent investment checks through the mails.

28. During Security Asset's note offering, the company, through its principals and sales agents (Musick, Wensel, Walton Jr., Walton Sr., Continental Capital, Carlson, Secure Investments, Spirk and the subagents), made numerous verbal and written material misrepresentations and/or omissions to investors regarding the use of the offering proceeds and the nature of the investment risk.

Misrepresentations Concerning the Use Of Proceeds

29. The crux of the fraud was misrepresentations in the offering materials regarding the intended use of the proceeds from the offering. Beginning in approximately June 1999, the Security Asset promissory note stated that "[the Company] and/or its subsidiaries [would use the proceeds to] purchase revolving pools of consumer debt obligations, to pay any commissions and to pay costs associated with management and collection of the consumer debt obligations."

30. In fact, in 1999, Security Asset only spent approximately $3.2 million of the $5 million it raised to purchase debt portfolios. Security Asset paid Secure Investments (Spirk), Continental (Carlson), and Wensel commissions of approximately $448,460, $57,292 and $42,503, respectively, which represented 12%, 1.34% and 2.66%, respectively, of each note sold. As of December 31, 1999, however, Security Asset had only $29,580.

31. The remaining $1.25 million of the offering proceeds for that period was used for purposes other than those listed in Security Asset's offering materials, including, among other things, to fund the operations of the company and its subsidiaries, to pay officers' salaries, and to pay interest and principal payments to earlier note investors. The proceeds of the offering were also used to pay personal expenses, including rent on an exclusive beachfront home used as Walton Jr.'s personal residence; car payments for Walton Jr.; daily upscale dining by Walton Jr. and Musick; lasik eye surgery for some company employees and their spouses; company gas cards (for non-business use); and cosmetic surgery for Walton Jr.'s girlfriend.

32. In 2000, Security Asset misused all of the offering proceeds raised that year. The company raised approximately $2.1 million from the sale of the notes but did not purchase any debt portfolios. Security Asset paid Secure Investments, Continental, and Wensel commissions of approximately $655,556, $47,903 and $88,139, respectively. As of December 31, 2000, Security Asset had remaining only $3,442.

33. Furthermore, the remaining $1.25 million of the proceeds raised during 2000 was used, as in the previous year, to pay interest and principal to earlier note investors, to pay the operating expenses of Security Asset and its subsidiaries, and to pay officers' salaries and personal expenses.

34. While its current expenses for 2000 totaled approximately $6.7 million, Security Asset had no significant source of revenue or operating capital other than the note proceeds.

35. By late 2000, Security Asset was unable to make interest or principal payments to investors because the money raised in the offering had already been spent on everything but debt portfolios. Without additional debt portfolios, Security Asset was not generating any revenues and continued to operate at a loss.

36. As of June 30, 2002, Security Asset's balance sheet reflected notes payable to investors in the amount of approximately $6.341 million.

37. In mid to late 2000, investors began to complain to Security Asset that they were not receiving principal or interest payments. Musick, Walton Sr. and Walton Jr. handled most of the investor complaints. Initially, Security Asset, primarily through Walton Jr., lied to investors by telling them, among other things, that new capital had been secured or that the "check was in the mail." Security Asset, acting by and through Walton Jr. and others acting at his direction, also mailed unsigned checks with the knowledge that they would not be honored and issued signed checks with the knowledge that Security Asset did not have funds to cover them. Walton Sr. and Musick handled all of the investor complaints, including those regarding bounced and unsigned checks.

38. Unable to quell investor complaints, Security Asset offered to convert outstanding notes to preferred shares or to replace the notes with new notes bearing less favorable terms. Security Asset sent investors the preferred shares whether or not they had agreed to the proposed conversion.

39. In fact, Security Asset initially issued 200 shares of preferred stock to each investor in an attempt to appease them. The vast majority of investors who sought refunds were refused. A few investors who retained counsel and threatened to sue were able to secure cash settlements.

40. On January 23, 2001, the PSC issued a cease-and-desist order requiring that Security Asset, Carlson and Walton Jr. cease and desist from selling, among other things, Security Asset's unregistered promissory notes in the Commonwealth of Pennsylvania.

Material Misrepresentations Concerning Nature of Investment Risk

41. Defendants Security Asset, Musick, Wensel, Walton Jr., Walton Sr., Continental Capital, Carlson, Secure Investments, and Spirk also misrepresented the material risks associated with the notes. The offering materials stated that Security Asset "has established itself over the past four years within the financial community as a quality, top-of-the-line portfolio purchaser" and created the impression that Security Asset was a solid company with a profitable business. However, the offering materials did not contain any financial statements or other information describing the financial condition of the company; nor did the offering materials describe any investment risks.

42. To the contrary, Carlson wrote a letter to the subagents in October of 1998, indicating that he, an experienced CPA, had conducted a thorough due diligence of Security Asset. Carlson's letter did not mention that the company had no revenue and significant accumulated deficits in 1998. Instead, the letter created the impression that Carlson considered Security Asset to be both a sound company and a good investment opportunity.

43. In reality, at the time of the offering, Security Asset was, at best, a highly speculative venture on the verge of financial collapse. The company's public filings showed, among other things, that it had operated at a loss since at least 1998; had a significant negative net worth; had limited access to capital; was the subject of a going concern opinion from the auditors; and depended completely on the proceeds from its offering to continue its business.

44. As of December 31, 1998, when the offering materials were prepared, Security Asset had no revenues, current liabilities that exceeded current assets by a 5 to 1 ratio, and accumulated deficits of $936,748. The situation worsened as the offering continued. For the year ending December 31, 1999, Security Asset had a net loss of $1.591 million on revenues of $1.802 million; for the year ending December 31, 2000, Security Asset had a net loss of $7.429 million on revenues of $1.952 million. None of this information, or the obvious risks attendant to investing in a company in such poor financial condition, was disclosed to investors.

Defendants' Roles in the Security Asset Fraud

45. Security Asset initially retained defendant Wensel to explore various means of raising funds and later hired him as a director in March 2001. Wensel presented Security Asset with the concept of selling promissory notes, and he became responsible for developing the program.

46. Security Asset subsequently retained Carlson, through Continental Capital, to be the exclusive distributor of the promissory notes.

47. Continental Capital, in turn, hired Secure Investments, Spirk's company, to sell the promissory notes through a network of independent insurance agents in Pennsylvania ("subagents") whom Spirk recruited.

48. Carlson and Spirk, in collaboration with Walton Jr., Musick, and Wensel, determined the information that would be disclosed to investors in the offering documents. They based Security Asset's offering materials on materials Spirk had used in an earlier promissory note offering.

49. Security Asset forwarded its offering materials to Continental and Carlson, who reviewed them and then sent them to Secure Investments. Secure Investments distributed the marketing materials to investors and to its subagents for use in the offer and sale of the notes.

50. Spirk and his subagents marketed and sold the notes to several hundred investors, who resided primarily in Pennsylvania. Some investors received the offering materials directly from Spirk. Other investors did not receive any marketing materials and relied merely on Spirk and/or his subagents' oral representations about the company and the investment. Investors who decided to purchase a note completed a promissory note application and either tendered a check or, for funds maintained in an IRA account, arranged for funds to be rolled over to an account in their name. The subagents forwarded the completed application along with the investor's check, if applicable, to Spirk, who retained either the original or copy of the application, and sent the other copy to Security Asset. Most investors received copies of the promissory note directly from Secure Investments and a term sheet from Security Asset, reflecting the terms of their investment including, but not limited to, the date of the note and the interest rate. Some investors received no documentation.

51. During the aforementioned two-year period, Walton Jr.'s misuse of the investment proceeds resulted in frequent altercations between Walton Jr. and Walton Sr., who expressed concerns over his son's spending patterns and misuse of the note proceeds. Musick, who witnessed some of these altercations, was often a beneficiary of Walton Jr.'s lavish spending, which spending was financed from note proceeds.

52. Walton Jr. died on March 11, 2003. Prior to his death, Walton Jr. had been the Chairman, CEO and CFO of Security Asset and had participated in Security Asset's fraudulent offering.

53. Walton Sr. was aware of the contents of the offering documents. As the company's treasurer and internal auditor, Walton Sr. had detailed knowledge about the company's finances, including those related to the note program. Specifically, Walton Sr. was responsible for, among other things, the collection of the offering proceeds, the maintenance of all books and records relating to the proceeds, the schedules of interest and principal payments to investors and the dispensation of the offering funds. Further, in 1999 and 2000, Walton Sr. signed the representation letters to the auditors, which stated, among other things, that the financial statements were accurate, that there were no instances of fraud involving management or employees who had significant roles in internal controls, and that there were no instances of fraud that would have a significant impact on the financial statements. As a result, Walton Sr. either knew or was reckless in not knowing that the company was not using the proceeds to purchase debt, particularly in 2000, as was represented in the offering materials.

54. As President of the Security Asset, Musick was primarily responsible for, among other things, purchasing the consumer debt portfolios for Security Asset. As a result, Musick either knew or was reckless in not knowing that the company was not using the proceeds to purchase debt, particularly in 2000, as was represented in the offering materials he helped to prepare. In addition, as both President and a member of the company's audit committee, as well as a signatory to the representation letters to the auditors, Musick either knew or was reckless in not knowing that the company was in dire financial condition, which subjected investors to significant risk of losing their entire investment. Yet, the offering materials he helped to prepare made no disclosures about either Security Asset's financial condition or the risks of investing.

55. Carlson was aware, no later than May 2000, that the offering proceeds were being misused. Carlson knew that Spirk and the other agents, whom he recruited, were continuing to sell these notes after May 2000. Carlson also continued to receive commissions from the sale of these promissory notes after May 2000.

56. Carlson also informed Spirk, no later than May 2000, that Security Asset was misusing the proceeds of the offering. Nevertheless, Spirk and his agents continued to sell the notes and collect commissions through January 2001 without disclosing the actual use of the offering proceeds.

57. Continental Capital, Carlson, Secure Investments, and Spirk, directly and through the subagents, made statements to investors that the notes were secure - "not risky" - and that the company guaranteed repayment, notwithstanding that Security Asset's financial statements clearly showed the company's precarious financial condition. Carlson and Spirk made these statements to investors without reviewing any current financial statements.

B. The Apacor Offering

58. Wallace, Carlson, Spirk, and Secure Investments organized a similar offering through defendant Apacor, whose primary business is refinancing delinquent credit card debt, promising a 14% return on nine-month promissory notes. Wallace, Carlson, Spirk and Secure Investments essentially replicated the Security Asset promissory note offering for Apacor. The Apacor promissory note application and security agreement were virtual copies of the Security Asset materials.

59. From August 2000 through at least March 2001, Apacor, through its principals and sales agents (Wallace, Carslon, Spirk, and Secure Investments), sold approximately $1.5 million of unregistered nine-month promissory notes to several dozen investors in Pennsylvania, who have lost all or most of their money.

60. Apacor, Wallace, Carlson, Spirk, Secure Investments and the subagents disseminated to investors information that contained material misrepresentations and omissions. The primary misrepresentations and omissions included the misuse of the offering proceeds and the nature of the investment risk.

Material Misrepresentations Concerning the Use of Proceeds

61. The essence of the Apacor fraud was the promise, found in the security agreement, to use the offering proceeds "to purchase consumer credit or to pay costs associated with the note."

62. Contrary to these representations, which were repeated to investors by Spirk and the subagents, the offering proceeds were used to pay the operating expenses of Apacor and Wallace's other companies, to pay Wallace's personal expenses, and to make interest and principal payments to earlier note investors.

63. Only $50,000 of the $1.5 million in offering proceeds was used to purchase debt portfolios. Without any actual consumer debt to service, Apacor generated little revenue and operated at a significant loss during the entire period.

64. By January 25, 2001, Apacor had ceased making any interest payments to investors. The money raised in the offering had already been spent.

65. On January 25, 2001, the PSC issued a cease-and-desist order requiring that Apacor, Carlson, and Wallace cease and desist from selling, among other things, Apacor's unregistered promissory notes in the Commonwealth of Pennsylvania.

Material Misrepresentations Concerning the Nature of Investment Risk

66. Apacor, Wallace, Carlson, Spirk, Secure Investments and the subagents also misrepresented the risks of investing in the notes. Specifically, Wallace and Carlson, through Spirk and the subagents, represented that, among other things, Apacor notes were secure investments, "not risky," and were guaranteed by the company. Further, the offering materials portrayed Apacor as a solid company in the profitable debt collection industry. Such statements were either false or misleading.

67. At all relevant times, Apacor operated at a loss. Specifically, for the period of January 2000 through October 2000, Apacor's unaudited financial statements reflected a net loss in the amount of $608,042 on reported revenues of $102,210.

68. Given Apacor's lack of operating history, its lack of experience in this business, the misuse of the proceeds, and the company's dire financial condition, investors faced a significant risk of losing their entire investments, and, in fact, they did. None of these facts - which were plainly evident on the company's own financial records - were disclosed to investors in either the offering materials or in the sales pitch to investors.

Defendants' Roles in the Apacor Fraud

69. Wallace - who has been convicted on federal criminal charges for conduct relating to this offering - was in charge of Apacor's operations, including the offer and sale of the Apacor notes and the use of the proceeds.

70. In early 2000, Carlson introduced the concept of the delinquent debt business to Wallace. Once Wallace decided to pursue the debt buying business plan, he named Carlson as Apacor's CFO and committed enough capital to hire staff and purchase a few portfolios.

71. By mid-2000, Apacor had nearly exhausted its initial capital and was struggling with high overhead and low revenues. Accordingly, Carlson arranged for Wallace to meet with Spirk to discuss the possibility of Spirk raising funds for Apacor through the sale of promissory notes.

72. Pursuant to a June 6, 2000 agency sales agreement ("agency sales agreement"), Secure Investments became the exclusive distributor of Apacor notes at the same time it was selling the Security Asset notes. As part of that agreement, Spirk, Secure Investments and the subagents received commissions for the sale of the notes.

73. In addition, according to the agency sales agreement, Apacor was to provide Secure Investments with current financial documents, an opinion letter regarding marketing the promissory notes as exempt securities and promotional material such as descriptive literature, data sheets and direct mail brochures. Secure Investments would then distribute the marketing materials to its subagents for use in the offer and sale of the notes.

74. Wallace, Carlson, and Spirk were responsible for the preparation of the marketing materials. Wallace, Carlson and Spirk determined the information that would be disclosed to the prospective note investors. In addition, Carlson signed many of the agreements with the investors on behalf of Apacor, which agreements included provisions concerning use of the proceeds.

75. Despite knowing that by January 31, 2001, Apacor could no longer satisfy its obligations to pay investors and that Apacor had been barred by the PSC from offering or selling such promissory notes in the Commonwealth of Pennsylvania, Wallace and Carlson continued to collect proceeds from the sales made by Secure Investments, Spirk and the subagents to Pennsylvania investors through March 2001.

76. As a result of Apacor's failure to pay interest, investors began to complain to the company. Wallace and Carlson handled most of the investor complaints. Wallace and Carlson attempted to lull investors into inaction by writing letters to investors and telling them that, among other things, Apacor's prospects were improving to the point that interest payments would soon be resumed. Such rosy statements were simply false -- Apacor had no products from which it could generate revenue. Further, they misled and lulled investors, who were aware of the PSC's involvement, by stating that the cease-and-desist action was meritless.

FIRST CLAIM FOR RELIEF

Violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b 5 thereunder
(against all defendants)

77. The Commission realleges and incorporates by reference each and every allegation in Paragraphs 1 through 76 above as if the same were fully set forth herein.

78. From approximately December 1998 and continuing through January 2001, defendants Security Asset, Musick, Walton, Sr., Wensel, Carlson, Continental Capital, Spirk, and Secure Investments, knowingly or recklessly, in connection with the offer, purchase or sale of securities, directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce, or the means or instrumentalities of interstate commerce, or the mails, or the facilities of a national securities exchange:

1. employed devices, schemes or artifices to defraud;
    
2. obtained money or property by means of, or made, untrue statements of material fact, or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and
    
3. engaged in acts, transactions, practices, or courses of business which operated as a fraud or deceit upon offerees, purchasers and prospective purchasers of securities.

79. From approximately August 2000 through March 2001, defendants Apacor, Wallace, Carslon, Spirk, and Secure Investments knowingly or recklessly, in connection with the offer, purchase or sale of securities, directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce, or the means or instrumentalities of interstate commerce, or the mails, or the facilities of a national securities exchange:

1. employed devices, schemes or artifices to defraud;
    
2. obtained money or property by means of, or made, untrue statements of material fact, or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and
    
3. engaged in acts, transactions, practices, or courses of business which operated as a fraud or deceit upon offerees, purchasers and prospective purchasers of securities.

80. By knowingly or recklessly engaging in the foregoing conduct, Security Asset, Musick, Walton, Sr., Wensel, Continental Capital, Carlson, Secure Investments, Spirk, Apacor, and Wallace violated Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a); Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b); and Rule 10b-5, 17 C.F.R. § 240.10b5 thereunder.

SECOND CLAIM FOR RELIEF

Violation of Section 5(a) and 5(c) of the Securities Act
(against defendants Security Asset, Musick, Wensel, Carlson, Continental Capital, Spirk, Secure Investments, Apacor and Wallace)

81. The Commission realleges and incorporates by reference each and every allegation in Paragraphs 1 through 80 above as if the same were fully set forth herein

82. From approximately December 1998 and continuing through January 2001, as the result of the conduct alleged herein, defendants Security Asset, Musick, Wensel, Carlson, Continental Capital, Spirk, and Secure Investments, offered for sale and sold securities, and made use of the means and instruments of transportation and communication in interstate commerce, and of the mails, to sell and offer to sell such securities. Defendants Security Asset, Musick, Wensel, Carlson, Continental Capital, Secure Investments and Spirk caused such securities to be carried through the mails and in interstate commerce, by the means and instruments of transportation, for the purpose of sale and delivery after sale.

83. From approximately August 2000 through March 2001, as the result of the conduct alleged herein, defendants Apacor, Wallace, Carslon, Spirk, and Secure Investments offered for sale and sold securities, and made use of the means and instruments of transportation and communication in interstate commerce, and of the mails, to sell and offer to sell such securities. Defendants Apacor, Wallace, Carslon, Spirk, and Secure Investments caused such securities to be carried through the mails and in interstate commerce, by the means and instruments of transportation, for the purpose of sale and delivery after sale.

84. With respect to the securities sold by Security Asset, Musick, Wensel, Continental Capital, Carlson, Secure Investments, and Spirk, no registration statements have been filed with the Commission or were in effect at the time of the conduct described herein, and no valid exemption from registration was available.

85. With respect to the securities sold by Apacor, Carlson, Secure Investments, Spirk, and Wallace, no registration statements have been filed with the Commission or were in effect at the time of the conduct described herein, and no valid exemption from registration was available.

86. By engaging in the foregoing, defendants Security Asset, Musick, Wensel, Continental Capital, Carlson, Secure Investments, Spirk, Apacor, and Wallace violated and, unless restrained and enjoined, will continue to violate Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) and 77e(c).

THIRD CLAIM FOR RELIEF

Violation of Section 15(a) of the Exchange Act
(against defendants Wensel, Continental Capital, Carlson, Secure Investments, and Spirk)

87. The Commission realleges and incorporates by reference each and every allegation in Paragraphs 1 through 86 above as if the same were fully set forth herein.

88. From December 1998 and continuing through January 2001, defendants Wensel, Continental Capital, Carlson, Secure Investments, and Spirk, directly and indirectly, by use of the mails or any means or instrumentality of interstate commerce, while acting as a broker or dealer engaged in the business of effecting transactions in securities for the accounts of others, effected transactions in securities, or induced or attempted to induce the purchase or sale of securities, without registering as a broker-dealer in accordance with Section 15(b) of the Exchange Act, 15 U.S.C. § 78o(b).

89. From approximately August 2000 through March 2001, defendants Secure Investments and Spirk, directly and indirectly, by use of the mails or any means or instrumentality of interstate commerce, while acting as a broker or dealer engaged in the business of effecting transactions in securities for the accounts of others, effected transactions in securities, or induced or attempted to induce the purchase or sale of securities, without registering as a broker-dealer in accordance with Section 15(b) of the Exchange Act, 15 U.S.C. § 78o(b).

90. By engaging in the foregoing, defendants Wensel, Continental Capital, Carlson, Secure Investments, and Spirk, directly and indirectly, have violated and, unless enjoined, will continue to violate Section 15(a)(1) of the Exchange Act, 15 U.S.C. § 78o(a)(1).

WHEREFORE, the Commission respectfully requests that this Court:

I.

Permanently restrain and enjoin Security Asset Capital Corporation, Darrell G. Musick, David S. Walton, Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., Gary J. Spirk, Apacor Financial, Inc., Richard C. Wallace, and their agents, officers, servants, employees, attorneys, and those persons in active concert or participation with them, directly or indirectly, singly or in concert, from violating of Section 17(a) of the Securities Act, 15 U.S.C. §§ 77(q)a; Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b); and Rule 10b-5, 17 C.F.R. § 240.10b-5 thereunder.

II.

Permanently restrain and enjoin Security Asset Capital Corporation, Darrell G. Musick, Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., Gary J. Spirk, Apacor Financial, Inc., Richard C. Wallace and their agents, officers, servants, employees, attorneys, and those persons in active concert or participation with them, directly or indirectly, singly or in concert, from violating of Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77(e)(a) and (c).

III.

Permanently restrain and enjoin Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., Gary J. Spirk, and their agents, officers, servants, employees, attorneys, and those persons in active concert or participation with them, directly or indirectly, singly or in concert from violating Section 15(a)(1) of the Exchange Act, 15 U.S.C. § 78o(a)(1).

IV.

Order Security Asset Capital Corporation, Darrell G. Musick, David S. Walton, Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., Gary J. Spirk, Apacor Financial, Inc., and Richard C. Wallace to disgorge any and all ill-gotten gains, together with prejudgment interest, derived from the activities set forth in this Complaint, in accordance with a plan of disgorgement acceptable to the Court and to the Commission.

V.

Order Security Asset Capital Corporation, Darrell G. Musick, David S. Walton, Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., Gary J. Spirk, Apacor Financial, Inc., and Richard C. Wallace to pay civil penalties pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)(3), in an amount to be determined by the Court.

VI.

Bar Darrell G. Musick and David S. Walton, pursuant to Section 21(d)(2) of the Exchange Act, 15 U.S.C. § 78u(d)(2), from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. § 78, or that is required to file reports pursuant to Section 15(d) of the Exchange Act, 15 U.S.C. § 78o(d).

VII.

Grant such other and further relief as the Court may deem just and appropriate.

Dated: February 18, 2004

http://www.sec.gov/litigation/complaints/comp18580.htm