Davie County knows Terry Norris Renegar as the person who has served as chairperson of the Board of Education for the past two years. As a member of the Board of Education (BOE), he is one of six people who represent the residents of Davie County in overseeing the education, safety, and character development of their children. As the chairperson of the Board of Education, Renegar may be the most influential of the six BOE members in determining Board policy concerning student education, safety, and character development.
If we were to believe allegations made by the North Carolina Securities Division (part of the NC Secretary of State’s office), there may be another Terry Norris Renegar with whom residents of Davie County may not be familiar. All information which follows is taken from public records in North Carolina which may be found at www.secretary.state.nc.us/sec/actions.aspx. When you get to the web page execute a “find” in your browser for “Renegar” (about 60 percent down the page) and click where indicated at the end of the summary of the Renegar administrative action to view as a PDF file the Consent Order issued against Renegar and others.
Consent Order
On December 14, 2006, Elaine F. Marshall, Secretary of State of North Carolina and the Securities Administrator of the Securities Division by its Deputy, David S. Massey, entered into a Consent To Entry Of Order (“Consent Order”) By Terry Norris Renegar, EFR Financial Services, LLC, and others. File No. 06-006-IG. Renegar executed the Consent To Entry Of Order as “Member/Manager of EFR Financial Services, LLC, on December 5, 2006; and for himself on the same date. The Order required the respondents to cease and desist immediately from four enumerated activities.
Four Enumerated Activities
a. offering for sale, soliciting offers to purchase, or selling, in or from North Carolina, the securities of ACM or any security of any issuer, howsoever denominated, unless and until said persons become registered as dealers or salesmen pursuant to the provisions of the North Carolina Securities Act;
b. in connection with the offer, sale or purchase of any security, omitting to state material facts necessary in order to make statements made, in light of the circumstances under which such statements arc made, not misleading;
c. in the solicitation of advisory clients, making any untrue statements of a material fact; and
d. transacting business in this State as an investment adviser representative unless and until said persons become registered as investment adviser representatives pursuant to the provisions of the North Carolina investment Advisers Act.
The elements of the Cease and Desist Order, shown verbatim, shown immediately above, were based on thirty-three Findings of Fact and four Conclusions of Law—all set forth in the Complaint which can be read in its entirety at the website identified above.
As a former securities lawyer who specialized in the laws and regulations applicable to brokerage firms, I have a special appreciation for the matters described in the Complaint. I choose not to share my thoughts because the text of the Findings of Fact or so clearly presented that a lay person should be able to understand the alleged activities of the respondents to the Complaint.
Although my readers may not understand the initial two Conclusion of Law without being familiar with the NC General Statutes, all readers should be able to understand the remaining two Conclusions which are reproduced in the right column.
Conclusions of Law
1, The Securities Administrator has jurisdiction over the subject matter of this proceeding and over the person of the Respondents.
2. The North Carolina Securities Division finds the Respondents have engaged in conduct in violation of the Securities Act and the investment Advisers Act, specifically N.C.G.S. §§78A-8, 78A-36, 78C-8(b), 78C-16(al) and 78C-19(a)(2)(b).
3. The North Carolina Securities Division finds the individual Respondents have engaged in conduct in violation of an order of the Administrator issued under the Investment Advisers Act.
4. The entry of this Consent Order is in the public interest for the protection ofinvestors and clients and consistent with the purposes fairly intended by the policy and provisions of the North Carolina Securities Act and the North Carolina Investment Advisers Act.
If you read the preceding carefully, you will note there was apparently a Consent Order prior the Order described above. In a word, there were apparently two Consent Orders: October 8, 2003, and December 14, 2006. The latter Order (paragraph 3 immediately above in the right column) concludes the former Order was apparently violated.
Respondent Renegar and the other respondents specifically agreed that North Carolina “may make such public announcement concerning this agreement and the subject matter thereof as the State of North Carolina may deem appropriate.”
The following appears on the North Carolina Secretary of State’s website at www.secretary.state.nc.us/sec/actions.aspx. This is the same website described above; however, this time you will not have to search for the information which follows:
A summary cease & desist order is issued by the Securities Division when it appears that ongoing activity violates the North Carolina Securities Act or the North Carolina Investment Advisers Act and poses the threat of irreparable harm to the investing public. The cease & desist order commands those who receive it to stop any further violations and to comply with the requirements of the securities laws. At the time of issuance of a summary order, the persons named in the order have not had the opportunity to respond to its allegations. The order notifies those persons that they may request a hearing on whether the allegations are true. If no hearing is requested, the Division will issue a final order confirming the allegations as true. A final order terminates the controversy between the parties and concludes the issues in the proceeding, unless and until it is vacated or set aside. (Emphsis added)
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On December 14, 2006 , the North Carolina Secretary of State, Securities Division issued a Consent Order to EFR Financial Services, LLC ; Roger Van Edwards ; Byron Keith Falls ; Terry Norris Renegar ; and Bryan Speas Davis . The Consent Order ordered the Respondents to immediately cease and desist from offering for sale, soliciting offers to purchase, or selling, in or from North Carolina, the securities of ACM Financial Trust, Inc. (formerly known as Atlantic Capital Management, Inc.) or any security of any issuer in violation of N.C.G.S. §§78A-8 and 78A-36. Respondents were also ordered to immediately cease and desist from transacting business in this State as an investment adviser representative unless and until said persons become registered as investment adviser representatives pursuant to the provisions of the North Carolina Investment Advisers Act and Respondents were also ordered to cease and desist from, in the solicitation of advisory clients, making any untrue statements of a material fact. Also, EFR Financial Services , LLC agreed to pay $20,000.00 in settlement of the securities investigation.
It is important to note that in agreeing to the entry of a Consent Order respondents neither admitted nor denied the Findings of Fact and Conclusions of Law contained in this Order; but they did consent to entry of the Order by the Secretary of State.
Analysis and Commentary
I am troubled by the State of North Carolina’s allegations relating to misrepresentations: omitting to state material facts as well as making statements that were allegedly untrue. Under federal securities law, these kinds of activities are described in the anti-fraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934. I am troubled by allegations of accepting fees which could only be accepted by persons properly licensed. I am further troubled by an alleged fee arrangement with a third party which was not disclosed to the respondents’ clients. Finally, there was an allegation of non-compliance with a prior Consent Order. Again, respondents did not admit or deny the preceding allegations. On the other hand, they agreed to a Consent Order and EFR Financial Services, LLC, referred to above, agreed to pay a fine of $20,000. See above.
I invite Terry Renegar to respond to the allegations in the Consent Orders. I will publish his response. If Renegar fails to respond, my readers should not assume he agrees with the allegations in the Consent Orders.
In subsequent issues of DavieFirst, I will use public documents to describe actions by the Board of Education and Davie County Schools which my readers may or may not conclude violated the laws of North Carolina and misrepresented important facts to the public—either by omission or comission. In each case, I will identify the persons holding the following positions: Chairperson of the Board of Education; Superintendent; and Attorney, Board of Education. Almost no analysis, commentary, or judgments on my part will be necessary. The public, documented facts which I present should “speak for themselves.”
Jay Mintz
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Next In The Spotlight:
Davie County Schools
Part I—A Cover-up And Other Bad Things?
Introduction
Coming March 22, 2012
