North Dakota regulators’ probe of Fargo financial firm ‘ongoing and expanding’ 

FARGO — Jeremy Lynn Carlson aimed to cater largely to excessive web price traders when he established a monetary advisory service initially primarily based out of his Fargo house known as Jamieson Capital Monetary.

Though he set no minimal funding, Carlson estimated that prime web price people made up greater than 75% of his clientele in a submitting in March of 2015, the 12 months he initially registered his firm with state securities regulators.

In time he would supply a various menu of funds for his investor shoppers by way of restricted legal responsibility corporations he created: Jamieson CAPEX Fund, Jamieson Medical, Jamieson Pure Sources Fund, Nova DC, Jamieson Legacy Fund, Mainstreet Funding Companions, Nationwide Sports activities Capital.

Since 2017, traders poured at the very least $17.7 million into the funds, investing in all the pieces from cryptocurrencies to medical marijuana dispensaries — with consumer funds deposited in financial institution accounts to which Carlson and Jamieson had “limitless entry” and over which they exercised “limitless discretion and management,” in line with paperwork issued by securities officers on July 15.

Jamieson Capital Monetary and restricted legal responsibility corporations created by Carlson generally collected 3% fee funds totaling at the very least $338,366, in line with North Dakota securities officers.

There was one other subject: Carlson utilized for registration as an funding adviser consultant of Fargo-based Jamieson Capital Monetary in November 2021, however his software standing was deemed “poor” as a result of he hadn’t handed the required qualifying examination, in line with regulators within the motion issued on July 15.

In truth, Carlson isn’t registered as a securities skilled in “any capability” in North Dakota, in line with securities officers. Equally, in line with state securities officers, Jamieson Capital Monetary has by no means been registered as a securities issuer-dealer or broker-dealer with the state.

Investigators for the North Dakota Securities Division allege they discovered a number of violations involving Jamieson Capital Monetary and Carlson, in line with regulatory actions.

These alleged violations embody taking direct and oblique possession of investor consumer funds, controlling investor funds, depositing investor consumer checks and directing wire transfers of investor funds, in violation of state securities regulation — a complete of at the very least 153 prohibited monetary “custody” transactions in Jamieson personal fund corporations.

State securities investigators allegedly discovered at the very least 64 prohibited, unregistered broker-dealer and unregistered agent violations by Jamieson and Carlson.

“Our investigation is ongoing and increasing,” stated Michael Daley, an enforcement legal professional with the North Dakota Securities Division, who declined to offer specifics as a result of the investigation is “lively and ongoing.”

Daley wouldn’t say whether or not any traders misplaced cash. He stated, nevertheless, that efforts to get better traders’ cash are persevering with.

State securities officers ordered Carlson and Jamieson to return “all investor funds” on deposit that had been invested within the funds Carlson created, administered by Jamieson Capital Monetary.

“This can be a very complicated and on-going investigation involving 1000’s of transactions, tens of millions of {dollars}, quite a few banks and financial institution accounts, and transfers of investor funds between and among the many Carlson personal funds over a interval of years,” Daley stated in an announcement.

“Figuring out what belongings can be found for investor restoration within the numerous funds, the identification of the traders who positioned their cash in a selected asset class, and what quantity they need to obtain, would require in depth evaluation,” he stated.

For that motive, Daley added, the state’s enforcement order towards Carlson and Jamieson Capital Monetary features a provision reserving the authority to order further measures to guard traders.

Carlson is cooperating with securities officers, in line with his lawyer.

“Mr. Carlson is engaged in ongoing discussions with the State to discover a resolution that protects the traders,” Fargo legal professional Michael Raum stated in a one-sentence assertion.

The investigation adopted a routine examination that discovered “quite a few deficiencies within the enterprise conduct of the agency,” which solicited investments in actual property, oil and gasoline, in addition to digital belongings and medical marijuana, securities officers stated in a information launch.

Jamieson and Carlson breached their fiduciary responsibility to behave of their shoppers’ finest curiosity and dedicated fraudulent practices in soliciting traders in Jamieson’s Nova DC fund, elevating at the very least $4.1 million from 21 traders, in line with paperwork filed by state securities officers.

The fund invested in numerous digital currencies with the target of offering members with a “premium return on their funding.” A $20 million providing would, if absolutely bought, end in web proceeds of $19.4 million to be invested in digital currencies, traders had been instructed.

Moreover being the president of Jamieson Capital Monetary, Carlson served as president of Nova DC and of Nova Administration, which managed the fund.

Nova DC invested at the very least $2.7 million in a number of cryptocurrencies, together with Coinbase International, FTX buying and selling and ByBit Fintech, and at the very least $260,000 of investor funds had been paid to a fund supervisor who had monetary ties to Nova and to Nova Administration, in accordance paperwork issued by securities officers.

In different transactions, $870,000 of the Nova DC fund had been lent to Michael Kuntz of Grand Forks and to entities he managed, together with Leftfield Improvement and Nationwide Sports activities Alternative Companions — makes use of aside from investing in digital belongings, in line with Securities Division paperwork.

In a separate regulatory motion filed July 29, Kuntz was discovered by state securities officers to have bought or provided on the market unregistered promissory notes or different types of debt totaling $1.9 million to funds operated and managed by Carlson.

“Nationwide Sports activities Alternative Companions, LLC, and its principal Michael Kuntz are absolutely cooperating with the Division and offering requested info in an effort to resolve these issues,” Kuntz’s Fargo lawyer, Chris Kennelly, stated in an announcement. “NSOP relied on third-party professionals all through the method.”

The Nova DC fund additionally paid $15,000 to ND Nation Fest. “The usage of investor consumer funds by the Respondents” — Jamieson and Carlson — “to sponsor a music pageant shouldn’t be in one of the best curiosity of traders and a breach of fiduciary responsibility,” the regulatory motion filed by the state stated.

Citing financial institution data and different paperwork, securities officers stated Jamieson and Carlson paid $50,000 in “earnest cash” from the Nova DC fund for a business property in Mandan and associated prices totaling $21,237.

Jamieson Medical and Mainstreet Funding Companions funds had been used to make a collection of funds totaling $3.9 million to the holder of membership items of Pure Dakota Holdings, whose Pure Dakota subsidiary holds a medical marijuana develop license and dispensary licenses in Williston and Bismarck, in line with paperwork.

The medical marijuana-related funds had been made though Carlson knew that a purchase order settlement hadn’t been executed and that an possession change of the membership items hadn’t been permitted by the North Dakota Division of Well being, as required by state regulation, in line with paperwork issued by securities officers.

A membership curiosity represents an investor’s possession stake in a restricted legal responsibility firm.

The North Dakota Securities Division on July 29 ordered Carlson and Jamieson to “stop and desist” from securities violations and knowledgeable Carlson that he and his agency might be topic to civil fines of at the very least $2.1 million. In a separate motion filed by the state, Carlson and the restricted legal responsibility firm funds he managed are topic to civil fines as much as $1 million.

Additionally, securities officers ordered Jamieson Capital Monetary’s funding adviser registration be suspended pending the result of the case, and gave discover they’ll search an order to revoke Jamieson’s funding adviser registration.

A listening to has been continued and isn’t but scheduled, Daley stated.