Maryland Securities Lawyers

Plaintiff Securities And Exchange Commission (The "Commission") Alleges As Follows

1. The matter involves two distinct fraudulent offerings of unregistered nine-month promissory notes, where investors were promised secure investments with 12% (or more) annual returns, and instead lost all or the vast majority of their money.

2. Defendants Security Asset Capital Corporation, Darrell G. Musick, David S. Walton, Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., Gary J. Spirk, Apacor Financial, Inc., and Richard C. Wallace falsely represented how the note proceeds were to be used and the nature of the investment risk.

3. In its offering, Security Asset Capital Corporation ("Security Asset") raised approximately $ 7 million from December 1998 through January 2001, while Apacor Financial, Inc. ("Apacor") raised approximately $1.5 million from August 2000 through March 2001.

4. Both Security Asset and Apacor were in the debt service business -- buying portfolios of distressed consumer debt for resale or refinancing, and both sold their notes through a common network of independent insurance agents. In addition, defendants Arthur B. Carlson, III ("Carlson"), Secure Investments, Inc. ("Secure Investments"), and Gary J. Spirk ("Spirk") were involved in both fraudulent offerings.

5. The misconduct in both offerings was essentially the same. In both unregistered offerings, the defendants violated the antifraud provisions of the federal securities laws by affirmatively misrepresenting the anticipated use of the offering proceeds and the risks associated with the investments. In both offerings, the defendants stated that investor funds would be used to purchase consumer debt portfolios and pay costs associated with the notes. In fact, the majority of the proceeds were used to pay salaries and commissions to the principals and salespeople, to pay personal expenses of the principals, and to pay prior investors.

6. The issuers and their respective principals also falsely stated that the notes were secure - "not risky" - investments guaranteed by the issuing company. The sales agents fraudulently repeated, and sometimes embellished, these material misrepresentations directly to investors.

7. No registration statement was in effect as to these promissory notes; nor were they exempt from registration. Moreover, the promissory notes were sold by persons who were not registered with the Commission as broker or dealers.

8. By knowingly or recklessly engaging in the conduct described in this Complaint, defendants Security Asset Capital Corporation, Darrell G. Musick, David S. Walton, Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., Gary J. Spirk, Apacor Financial, Inc., and Richard C. Wallace have violated, and unless restrained and enjoined will continue to violate, Section 17(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. § 77q(a); Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. § 78j(b); and Rule 10b-5, 17 CFR § 240.10b-5, thereunder.

9. By engaging in the conduct described in this Complaint, defendants Security Asset Capital Corporation, Darrell G. Musick, Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., Gary J. Spirk, Apacor Financial, Inc., and Richard C. Wallace have violated, and unless restrained and enjoined will continue to violate, Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77(e)(a) and (c).

10. By engaging in the conduct described in this Complaint, defendants Richard E. Wensel, Continental Capital Group, Ltd., Arthur B. Carlson, III, Secure Investments, Inc., and Gary J. Spirk, have violated, and unless restrained and enjoined will continue to violate, Section 15(a)(1) of the Exchange Act, 15 U.S.C. § 78o(a)(1

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