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SEC accuses local firm of bilking investors out of $1.7M

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A local investment firm accused of bilking clients out of more than $1.7 million is the target of a civil lawsuit filed Monday by the Securities and Exchange Commission.

Rykoworks Capital Group LLC in Brownsburg and its owner, Ryan W. Koester, 40, are named in the suit, in addition to Trafalgar insurance salesman Rudolf D. Pameijer, 61, and his daughter Lindsay R. Sayer, 32.

Without admitting or denying the allegations, Pameijer and Sayer already have agreed to waive their right to a jury trial and entered into a settlement that permanently prevents them from providing investment advice in the future. They also could be ordered to repay victims with additional civil penalties.

The SEC’s complaint filed in U.S. District Court in Indianapolis accuses the trio of committing securities fraud by misappropriating investor funds for their personal use. Pameijer used the money for luxury automobiles, a motorcycle, a 30-foot boat, his son’s college tuition, a car for Sayer and various home renovations, the suit said. It said he also used funds to pay for Sayer's wedding and her honeymoon in St. Lucia.

The suit stems from an investigation by the Indiana Secretary of State's office in which Rykoworks and Pameijer's Plan America LLC in Indianapolis had their assets frozen.

Koester, Pameijer and Sayer were not licensed to provide investment advice or to sell securities in Indiana, the securities division said.

The SEC alleges that the scheme began when Pameijer, a career insurance salesman, met Koester at a marketing event in October 2009. At the event, Koester held himself out as an expert foreign currency trader, prompting Pameijer to ultimately enter into a profit-sharing agreement with Koester for clients Pameijer brought to Rykoworks.

Pameijer and Sayer began soliciting clients in October 2010 to invest with Rykoworks through promissory notes that purported to guarantee 12-percent returns, the lawsuit claims.

“Many of the investors were unsophisticated,” the complaint said, “and some included friends and family of Pameijer.”

The largest defrauded investors were a retired scrap metal worker and his wife, who gave Pameijer $1.1 million, the complaint said.

Pameijer and Sayer transferred remaining investor funds that they did not misappropriate to Koester and Rykoworks, which Koester depleted through trading losses and personal expenses. Koester also misappropriated additional funds that he raised directly from investors, according to the SEC.

As part of the scheme, the trio provided false account statements and information to investors, the suit said.

By fall 2011, Pameijer urgently sought to raise additional funds from new investors. But Koester eventually became unresponsive to Pameijer, and Pameijer told clients that Koester had absconded with their funds, the complaint alleges.


 

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  • do your homework
    “Many of the investors were unsophisticated,” the complaint said, “and some included friends and family of Pameijer.” --------------- This quote says it all. Anyone that thinks 12 percent returns can be guaranteed is going to get whats coming to them. The SEC too often gives consumers a false sense of security. With bad apples like this advisor it gets more people thinking more regulation is the answer. All more regulation does is make people think they are safer while increasing costs and preventing good advisors from growing their business

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  1. Apologies for the wall of text. I promise I had this nicely formatted in paragraphs in Notepad before pasting here.

  2. I believe that is incorrect Sir, the people's tax-dollars are NOT paying for the companies investment. Without the tax-break the company would be paying an ADDITIONAL $11.1 million in taxes ON TOP of their $22.5 Million investment (Building + IT), for a total of $33.6M or a 50% tax rate. Also, the article does not specify what the total taxes were BEFORE the break. Usually such a corporate tax-break is a 'discount' not a 100% wavier of tax obligations. For sake of example lets say the original taxes added up to $30M over 10 years. $12.5M, New Building $10.0M, IT infrastructure $30.0M, Total Taxes (Example Number) == $52.5M ININ's Cost - $1.8M /10 years, Tax Break (Building) - $0.75M /10 years, Tax Break (IT Infrastructure) - $8.6M /2 years, Tax Breaks (against Hiring Commitment: 430 new jobs /2 years) == 11.5M Possible tax breaks. ININ TOTAL COST: $41M Even if you assume a 100% break, change the '30.0M' to '11.5M' and you can see the Company will be paying a minimum of $22.5, out-of-pocket for their capital-investment - NOT the tax-payers. Also note, much of this money is being spent locally in Indiana and it is creating 430 jobs in your city. I admit I'm a little unclear which tax-breaks are allocated to exactly which expenses. Clearly this is all oversimplified but I think we have both made our points! :) Sorry for the long post.

  3. Clearly, there is a lack of a basic understanding of economics. It is not up to the company to decide what to pay its workers. If companies were able to decide how much to pay their workers then why wouldn't they pay everyone minimum wage? Why choose to pay $10 or $14 when they could pay $7? The answer is that companies DO NOT decide how much to pay workers. It is the market that dictates what a worker is worth and how much they should get paid. If Lowe's chooses to pay a call center worker $7 an hour it will not be able to hire anyone for the job, because all those people will work for someone else paying the market rate of $10-$14 an hour. This forces Lowes to pay its workers that much. Not because it wants to pay them that much out of the goodness of their heart, but because it has to pay them that much in order to stay competitive and attract good workers.

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