A Colorado publishing company and its owner have been sanctioned by the state’s Securities Commission.
Katana Financial Group and Adam Dennis Paplow, both of Littleton, are accused of allegedly violating the securities registration and anti-fraud provisions of the Colorado Securities act, said Commissioner Fred Joseph.
The staff of the Colorado Division of Securities said that Katana and Palow, in an attempt to raise funding for a magazine, posted an Internet advertisement seeking capital to expand. The advertisement promised 9 to 21 percent return on investment in six to 12 months. The terms on a $25,000 investment were 24 percent interest payable at $500 a month for 12 months.
Respondents failed to register the offering and were in violation of state law. The staff also alleged that respondents violated the state’s fraud provision by failing to disclose a chapter 13 bankruptcy in 2008, a chapter 7 bankruptcy in 2002 and five civil actions filed against him between 2005 and 2008.
“Investors should be wary of any investment opportunities found on the Internet, especially those that promise unreasonably high short term returns,” Joseph said. “Contact our office to verify that securities have been properly registered before purchasing any security.”
The cease and desist order, which the respondents agreed to, prohibits them from offering or selling securities in Colorado in violation of the Colorado Securities Act.