FOR IMMEDIATE RELEASE
February 22, 2006
Contact OFIS Directly (toll-free): 877-999-6442
Media/Press calls: Andy Schor: 517-335-1700
Action taken on Security/Fraud
Violations in Southeast Michigan
The Office of Financial
and Insurance Services (OFIS) announced the revocation of the Investment Adviser
Registration of Vazilyn Poinsetta & Associates, Inc. (VPA). OFIS also ordered
its President, Vazilyn Poinsetta to Cease and Desist from further violations
of the Michigan Uniform Securities Act. Both VPA and Poinsetta were ordered
to pay civil penalties of $10,000.00, due no later than March 31, 2006.
VPA was licensed as an investment
firm located in Southfield, Michigan and operated by Poinsetta. Poinsetta also
had been involved in securities dealings, primarily with residents of Wayne
and Oakland counties.
OFIS Commissioner Linda
A. Watters said, “Vazilyn Poinsetta used her position to steal hard-earned
dollars from unsuspecting consumers. After a full investigation and administrative
process I am pleased to report that we have shut her down.”
Charges made against Poinsetta
were:
- As
VPA’s president, Poinsetta offered and sold unregistered securities
primarily to Michigan investors.
- Poinsetta
made false statements to OFIS regarding VPA’s application for registration
as an investment adviser.
- Poinsetta
organized and operated a “Ponzi” scheme where she falsely claimed
that she was a Certified Financial Planner and convinced many investors that
she could help them generate greater returns on their investments. Promising
a high rate of return, she would allegedly deposit the funds into a commercial
checking account that she controlled. She placed well over $1 million of investor
funds in this non-interest bearing checking account. She told investors that
they could withdraw funds at any time, but in many cases investors were unable
to actually receive their funds when it was requested or they received checks
that bounced.
- Poinsetta
offered and sold unregistered securities from 1997 to 2003 in both Real Land
Securities, Inc., and Capital Venture Fund I Limited Partnership (also known
as the Capital Venture Fund).
- VPA
was financially insolvent for its last 3 fiscal years of operation (2001,
through and 2003). Despite this, Poinsetta, on behalf of VPA, filed a false
financial statement in 2002 with OFIS indicating VPA was solvent.
- Poinsetta
continued to operate as a securities agent even after her agent registration
was terminated on November 27, 2002.
- In
response to investor complaints in 2004, OFIS conducted an examination of
VPA. As President and the investment adviser representative for VPA, Poinsetta
attempted to interfere with OFIS’ examination by not providing all requested
or subpoenaed documents and not allowing OFIS staff to examine all of her
firm’s records, in all of which is a violation of the Act.
On October 11, 2004, Watters
issued an Order for Summary Suspension, Order to Cease and Desist and Notice
of Administrative Hearing that required Poinsetta and VPA to immediately stop
transacting business in Michigan as a registered investment adviser due to alleged
violations of the Michigan Uniform Securities Act. Poinsetta requested an administrative
hearing on this matter. The case went before the Michigan State Office of Administrative
Hearings and Rules (SOAHR) and the Administrative Law Judge found that OFIS
had proven the factual allegations in the Order and as a result OFIS established
that VPA and Poinsetta violated the Act.
The OFIS
Final Decision order can be found at www.michigan.gov/ofis.
The Proposal for Decision
by the Administrative Law Judge can be obtained through the SOAHR Bureau of
Hearings.
Link
To Order For Summary Suspension, Order To Cease And Desist, And Notice Of Administrative
Hearing
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