SEC bars Washington State RIA for selling unregistered promissory notes

Complaint alleges Jack Jarrell sold $64 million in securities without being licensed

Jul 25, 2018 @ 2:36 pm

By InvestmentNews

The Securities and Exchange Commission has barred Jack Jarrell, an investment adviser representative at OAG Wealth Management in Kirkland, Wash., for selling unregistered promissory notes without being a broker-dealer or being affiliated with one.

From 2013 to 2017, Mr. Jarrell was the managing member and chief compliance officer of the firm, of which he owns at least 75%.

The SEC complaint alleges that from 2012 to 2016, Mr. Jarrell offered and sold the unregistered promissory notes and did not disclose the significant compensation he earned for selling the notes to any note purchasers, including those with whom he had advisory agreements in place.

The securities in question promised to pay investors annual returns generally ranging from 12% to 13%. They were supposed to fund the "factoring" of accounts receivable in Brazil.

Instead, the underwriters and distributors of the securities, Providence Financial Investments and the Providence Fixed Income Fund, "diverted significant portions of investor proceeds to uses other than investing in factoring transactions," the SEC said.

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