The Kansas Securities Commissioner's office served a cease-and-desist order today on a Wichita private equity firm, alleging violations of the state's Uniform Securities and Loan Brokers Acts.
The order against Lion Share Capital LLC, Lion Share Capital Partners and its officials — Jeffrey K. Williams, Sherrilynn L. Frierson, Mark K. Nordyke and Gregory A. Buss — alleges that the company violated the acts by collecting more than $550,000 to find lenders for more than 20 companies in Kansas and across the United States, said Rick Fleming, general counsel to Kansas Securities Commissioner Chris Biggs.
The order also alleges that Lion Share was getting an equity stake in several of the companies along with the "due diligence/good faith" fees.
"When they did that, then what we're alleging is that in connection with the purchase of a security, they made material misrepresentations and omissions," Fleming said.
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Those alleged misrepresentations and omissions include:
* Williams, the general manager of Lion Share, failed to disclose his 2005 conviction for fraud in Illinois and his subsequent time in a federal penitentiary.
* The advance fee was refundable when it was not.
* The fee would be used for due diligence and to procure funding when it was used for personal expenses and operating costs.
* That similar projects had been funded successfully by Lion Share when they had not.
The order does not shut Lion Share's doors, Fleming said. It only requires that the violations of the two acts cease.
"To the extent that they can continue to function without violating these acts, they're fine," Fleming said.
However, the administrative action by Biggs' office does not preclude further action, including the filing of charges, Fleming said.
In addition, Lion Share officials can appeal the order to Biggs' office.
Williams had not returned calls for comment.
For more on this story, come back to Kansas.com or see Tuesday's Eagle.