Baltimore company issued cease-and-desist over unregistered securities
Doug Gansler (D)
BALTIMORE (Legal Newsline) - A Baltimore company that offers unregistered secured notes backed by real estate in advertisements in a local paper widely read by senior citizens has been issued a Summary Order to Cease and Desist by Maryland Attorney General Doug Gansler's office.
Patuxent Management LLC, Patuxent Development Inc., and Antonio Almenara are named in the order, which requires that all offers and sales of the unregistered securities be ceased.
"Ads in Maryland offering unregistered, non-exempt securities are unlawful," Gansler said. "But ads for something as potentially risky as real estate backed investments, aimed at our senior population, are particularly troubling."
In a January edition of The Beacon, one ad offers an opportunity to, "Invest at *% Secured," adding that "Notes [are] fully secured by local real estate." The ad also states that "IRA or Pension funds are acceptable" for investment.
Potential investors are given a "301" telephone number to contact Patuxent Management LLC or are told to use an apparent e-mail address.
The Securities Division's order alleges that the "notes" constitute promissory notes or investment contracts, which, under the Maryland Securities Act, are passive investments defined as "securities." Because of that definition, they must be registered prior to their offer or sale in Maryland.
No record of securities registration for an offering by the name of Patuxent Management LLC or Patuxent Development Inc., is held by the Maryland Securities Division. Additionally, no claim of exemption from registration or status as a federal-covered security has been made with the Division.
Patuxent Management LLC, Patuxent Development Inc., and Antonio Almenara are also not registered with the Division as broker-dealers, securities agents, investments advisors or investment advisor representatives.
"The lure of a secured rate and the appeal to pension or IRA funds are clearly aimed at persons with concerns over retirement funding," Gansler said. "The absence of any filings with my office indicates the promoters are not adhering to State law, and may not even be identifiable should the investment go bad."