A Wichita private equity firm will appeal a state cease-and-desist order that alleges regulatory infractions.
Greg Buss, the chief operations officer for Lion Share Capital, said Thursday that the company has requested a hearing before Kansas Securities Commissioner Chris Biggs on the order, which was served Monday.
The order, against Lion Share Capital LLC, Lion Share Capital Partners and its officials, claims that the company violated the state's Uniform Securities and Loan Brokers Acts by collecting more than $550,000 to find lenders for more than 20 companies in Kansas and across the United States.
Lion Share is at 110 S. Main, Suite 410, in Wichita. Buss is named in the order, along with Jeffrey K. Williams, Sherrilynn L. Frierson and Mark K. Nordyke.
"We just want to get it taken care of," Buss said. "I really don't want to address the specific allegations. I want my attorneys to have their full abilities to address them. The main thing for people to understand is that with the cease-and-desist order, we're still in business. We're still operating to bring in the capital we're working on."
The order alleges that Lion Share was charging clients an advance fee for obtaining a lender, while obtaining an equity stake in several of the companies along with the advance fee.
It alleges that in those transactions, Lion Share made "material misrepresentations and omissions," including:
* Williams, the general manager of Lion Share according to the company Web site, failed to disclose his 2005 conviction for fraud in Illinois and his subsequent time in a federal penitentiary. According to a May 10, 2005, news release from Patrick Fitzgerald, U.S. Attorney for the Northern District of Illinois, Williams, now 38, was found guilty of fraud charges "arising from a scheme to illegally take over businesses and then drain cash from those businesses."
* 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 hearing request has not been received by Biggs' office, said Gail Bright, associate general counsel. However, it would be well within the 30-day window for an appeal, she said.
This week's order, Bright said, does not preclude further action by Biggs' office, including the filing of criminal charges.
Bright said it's "too early" to tell if Lion Share is complying with the order, but the company is within its legal rights to continue to operate.
And that's what they're doing, Buss said — continuing to raise funding for development projects.
"We've developed ways we really think are the new way to develop from all this (economic) turmoil," he said. "It's just taking longer than anticipated, but we're working hard to accomplish them, and we will."