Md. AG issues cease-and-desist against mortgage company
BALTIMORE (Legal Newsline) - Maryland Attorney General Douglas F. Gansler's Securities Division ordered a Montgomery County-based mortgage company to cease and desist violating Maryland's securities law on Thursday.
The Securities Division ordered WEI Mortgage Corporation and Wesley Yuan, its principal, to cease and desist violations of Maryland's securities laws.
WEI and Yuan are charged with engaging in the offer and sale of unregistered, non-exempt securities in the form of "FPP" or "Funding Participation Program" promissory notes. The defendants allegedly misrepresented to investors that FPP notes were not securities investments and that they involved "little to no risks."
"All securities investments involve some degree of risk that the value of the investments will either go up or down," Gansler said.
"The Order requires WEI Mortgage Corporation and its principal to cease from soliciting investors by misleading them into believing that these investments are without material risk and that the offer and sale of the promissory notes are not regulated by the Securities Division."
The order alleges that WEI Mortgage Corporation advertised the sale of its notes to the general public on its Web site, www.weicorp.com, and in advertisements placed in the Asian Gazette and Washington Chinese News newspapers that are circulated in Maryland.
The FPP program was identified on the company's Web site as offering a fixed rate of return and as having advantages over other more mainstream investments, including bank CDs, mutual funds and stocks, it is alleged.
Proceeds from the sale of FPP notes, the Web site claimed, would be used to fund WEI's mortgage business. FPP earnings, the Web site said, were derived from WEI's practices in originating, financing and trading mortgage loans.