Joel’s Cease and Desist

Unable to locate a document as old as the Cease and Desist on Missouri’s Securities site, I emailed them.  Lo and behold, I got a response!  A paralegal was kind enough to forward a copy of the Cease and Desist order, issued in 1988.

In August 1988, the Commissioner found out that in 1983, Prudential Petroleum offered and sold a filing service to provide investors oil and gas leases through the federal lottery in the State of Missouri. The State considers this to be “soliciting investments for a filing service.” Prudential Petroleum was not registered and did receive an exemption to do this.

In September 1988, the Commissioner sent a letter to Joel asking for his exemption or why he thought he didn’t need to register to sell securities in their state. They also wanted Missouri investor information. His wife, Carol, signed for the letter, which makes sense since that was their residence.

Joel’s lawyer responded in October 1988 stating that the company was an “advisory company which assisted individuals in entering the oil and gas lottery run by the United States Government.”  I’d love for someone to explain to me how that’s different from “soliciting investments for a filing service with the federal oil and gas lease lottery.”  It certainly sounds like the same thing.  Because it is.  Anyway, the lawyer goes on to say that the government stopped the lottery procedures and the company has been out of business for four years.  Also, Joel no longer has any of the records requested.

How convenient.  In any event, the cease and desist order reads:

NOW THEREFORE it is ordered by the Commissioner of Securities that Respondents, their agents, employees and servants CEASE AND DESIST the offer and sale of securities in violation of Section 409.301, RSMo 1986.

Joel’s response in his FINRA report stated that he was the Vice President and there were advertising materials with his name on it which solicited investors in Missouri.  He claims to not have done anything wrong.

I don’t buy Joel’s story.  There’s no indication that there was anyone else involved with the company.  Joel holds himself out to be the VP but doesn’t mean that he wasn’t also the President and Treasurer.  There are no records online that date far back enough to determine this one way or another.

Joel also claims that he was shocked to learn of the Cease and Desist when he tried for a Series 6 license in 1989, despite it happening in November of 1988.  It certainly did not happen behind his back since his wife signed for the initial notice from Missouri and his lawyer responded.  The order was issued soon after, so I don’t see how he didn’t know.

His lawyer also gave an incorrect response.  You see, business was closed sometime after they filed a “no change” report with the state on 2/22/1985, since you don’t file a “no change” when you close.  So, when the lawyer said in 1988 that the business had been closed for four years, he was easily a year off.

To add to all this, when I was poking around pacer, waiting for the nighttime Mucinex to start to kick in, I found a number of cases of SEC vs Nationwide in various states, many of which were closed shortly after they were opened.  There is not one for every state, but there are quite a few.  I did not look into all of them, but I looked into the one in Missouri.  Yes, Missouri.  I can’t see the SEC filing any kind of court action in a state in which there were no victims, so Joel must have procured at least one investor in Missouri.

If NASI wasn’t a Ponzi scheme, then they were engaging in the sale of securities – something which Joel was specifically ordered to stop doing in the state of Missouri. It’s amazing that the more we look into his history, the more and more it seems that he did not make “one mistake” as so many people want to claim he did.

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