The Securities Commissioner of the State of Kansas has issued a cease and desist order to Lion Share Capital, a Kansas group claiming to arrange third-party financing for a wide range of companies.
The group has violated or is about to violate the Kansas Uniform Securities Act, as well as the Kansas Loan Brokers Act, according to the order, which the Securities Commissioner issued after a recent investigation of Lion Share’s activities.
Lion Share has signed agreements with more than 20 companies in Kansas and throughout the US to obtain funding for those companies through third-party sources, referred to as “deal flow”. In exchange, the companies have sent Lion Share “due diligence/good faith fees” that collectively amount to more than $550,000, according to the order.
The fees were marketed as being fully refundable. But in each transaction, Lion Share told the companies it was unable to find financing as planned, and then refused to return the fees, the order said. Additionally, though Lion Share told the companies the fees would be used for due diligence, the fees were actually used for personal expenses and operating costs.
The Securities Commissioner also said Lion Share failed to disclose that Jeffrey Williams, described on the group’s website as the “proverbial quarterback” of the team, had previously been convicted of fraud.
Lion Share’s general sales manager, Lemuel Ford, did not comment on the cease and desist order when contacted by PEM, but said that only the group’s “equity business” had been affected.
Lion Share began operations in the second quarter of 2007, according to its web site. Williams, the firm’s general manager, is described as having founded and operated “an Illinois mortgage brokerage firm, an investment banking consulting firm as well as a national buyout firm”. He has also “served as the national sales coordinator of a national manufacturing firm with over 200 sales people”.