The U.S. Securities and Exchange Commission issued public administrative and cease and desist orders against John Fortenberry of San Angelo for securities fraud. The order included Fortenberry's prior offenses:
Fortenberry has twice previously been subjected to cease-and-desist orders in connection with securities fraud. In 2004, both the Pennsylvania Securities Commission and the Texas State Securities Board ordered Fortenberry to cease and desist from selling unregistered securities.
According to the Administrative Proceeding Fortenberry victimized two investors of a total of $300,000.
In 2010 and 2011, Fortenberry intentionally used the name “John”—a misspelling of his middle name—when soliciting investors and drafting Premier’s partnership agreement.The document states:
In all, Fortenberry took at least $148,500 of investor proceeds in undisclosed management fees, personal expenses, and cash withdrawals, none of which was disclosed to Premier’s investors. Indeed, instead of using these assets of Premier for its investment purposes, he acted for his self-interests and misappropriated the assets for his own personal benefit.What's next?
Fortenberry used Premier’s (investor) funds to pay for travel and concert tickets for his family members, personal credit card payments, clothing, jewelry, groceries, cable bills, utilities, insurance, unknown expenditures via PayPal, a Netflix subscription, car repairs and maintenance, gasoline, convenience and liquor store purchases, and trips to various restaurants and coffee shops.
IT IS ORDERED that a public hearing for the purpose of taking evidence on the questions set forth in Section III hereof shall be convened at a time and place to be fixed, and before an Administrative Law Judge.
IT IS FURTHER ORDERED that Respondent shall file an Answer to the allegations contained in this Order within twenty (20) days after service of this Order.
This Order shall be served forthwith upon Respondent personally or by certified mail.
The order is dated April 28, 2014. Does he already know? Will he find out via certified mail or the internet?
The original SEC filing from August 2010 shows the fund paying $200,000 in finders fees for a $9.99 million fund. He never came close to raising the nearly $10 million but Fortenberry came close to bleeding his investors of $200,000. This story should be interesting to follow.