Legislature and Banking & Finance and State Government and Investing and Securities fraud and Government & Economic Development and Government and Tim Durham

Indiana tries to close loophole that helped Durham commit fraud in Ohio

February 16, 2013
otr-fair-finance-021813-15col.jpg Fair Finance investors found a locked door after offices closed in 2009. (IBJ file photo)

Indiana officials want to make sure the kind of fraud that Tim Durham perpetrated with Fair Finance in Ohio doesn’t happen here.

The Legislature is moving a bill that would close a state securities law loophole, which allows intrastate offerings to file unaudited financial statements.

Intrastate offerings can be sold only by a company registered within the state to residents of the state. There are few such offerings in Indiana, but House Bill 1179 would require them to be accompanied by audited financials. The House voted for the bill, 99-0, on Feb. 5.

Fair Finance, the Akron, Ohio, company that Durham bought, looted and turned into a Ponzi scheme, was an intrastate offering in Ohio. The company lost $230 million put up by Ohio investors.

As Durham’s criminal case unfolded last year, Secretary of State Connie Lawson said, “Many have wondered if this could happen here in Indiana and how they can protect themselves from thieves like Durham.”

She lauded the efforts of Reps. Bob Heaton, Dale DeVon, Justin Moed and Christina Hale “for giving our securities regulators the tools they need to protect Hoosier investors from similar crimes and to prevent this from happening in Indiana.”

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