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IECOMMISSIONEROFCOMMERCEANDINSURANCE1,'0"CONSENTORDER12.
06-104082JTheTennesseeSecuritiesDivision(''TSD")andtheTennesseeInsuranceDivision'("TID")(collectively,the"Divisions")andWilliamWalterSpenceragreetotheentryofthisConsentOrderinaccordancewithTENN.
CoDEANN.
§48-2-lJ6oftheTennesseeSecuritiesActof1980,asamended,TENN.
CODEANN.
§§48-2-1OJ,etseq.
(the"Act"),whichstatesthattheCommissioneroftheDepartmentofCominerceandInsurance("Commissioner")mayfromtimetotimemakesuchordersasarenecessarytocarryouttheprovisionsoftheAct,andinaccordancewiththeTennesseeInsuranceProducerLicensingActof2002,TENN.
CODEANN.
§§56-6-JOJ,etseq.
(the"Law").
Respondent,WilliamWalterSpencer,herebystipulatesandagrees,subjecttotheapprovalof·theCommissionerasfollows:1.
GENERALSTIPULATIONSl.
ItisexpresslyunderstoodthatthisConsentOrderissubjecttotheCommissioner'sacceptanceandhasnoforceandeffectuntilsuchacceptanceisevidencedbytheentryofthe.
Commissioner.
2.
ThisConsentOrderisexecutedbytheRespondentforthepurposeofavoidingfurtheradministrativeactionwithrespecttothiscause.
Furthermore,shouldthisConsentOrdernotbeacceptedbytheCommissioner,itisagreedthatpresentationtoandconsiderationofthisConsentOrderbytheCommissionershallnotunfairlyorillegallyprejudicetheCommissionerfromfurther.
patticipationorresolutionoftheseproceedings.
3.
RespondentfullyunderstandsthatthisConsentOrderwillinnowayprecludeadditionalproceedingsbytheCommissioneragainsttheRespondentforactsoromissionsnot·specificallyaddressedinthisConsentOrderforfactsand/oromissionsthatdonotarisefromthefactsortransactionshereinaddressed.
4.
RespondentfullyunderstandsthatthisConsentOrderwillinnowayprecludeadditionalproceedingsbytheCommissionerofCommerceandInsuranceoranyotherstategovernmentrepresentativeagainsttheRespondentforviolationsoflawunderotherstatutes,rules,orregulationsoftheStateofTennessee,whichmayariseoutofthefacts,acts,oromissionscontainedintheFindingsofFactandConclusionsofLawstatedherein,orwhichmayariseasaresultoftheexecutionofthisConsentOrderbytheRespondent.
5.
Respondentexpresslywaivesallfurtherproceduralsteps,andexpresslywaivesallrightstoseekjudicialreviewofortootherwisechallengeorcontestthevalidityoftheConsent2Order,thestipulationsandimpositionofdisciplinecontainedherein,andtheconsiderationandentryofsaidConsentOrderbytheCommissioner.
FINDINGSOFFACTI.
TheTennesseeSecuritiesActofl980,asamended,TENN.
ConEANN.
§§48-2-101,et~·(the"Act"),placestheresponsibilityfortheadministrationoftheActontheCommissionerofCommerceandInsurance("Commissioner").
TheTSDisthelawfulagentthroughwhichtheCommissionerdischargesthisresponsibility.
TENN.
CODEANN.
§48"2-115.
2.
.
TheTennesseeInsuranceLaw,asamended,TENN.
CODEANN.
§§56-1-101,etseq.
(the"Law"),placestheresponsibilityfortheadministrationoftheLawontheCommissioner.
TheTIDisthelawfulagentthroughwhichtheCommissionerdischargesthisresponsibility.
3.
Respondent,WilliamWalterSpencer("Spencer")(CRD#1443074)(License#728225),isacitizenandresidentofWilliamsonCounty,Tennessee,residingat4341SouthCarothersRoad,Franklin,Tennessee,37064.
4.
Duringthetimespertinenttotheallegationscontainedherein,Spencerwasregistered.
asanagentundertheActthroughthefollowingbroker-dealerfirms:I)Legg,Mason,WoodandWalker,Inc.
("LMWW")(CRD#6555)fromJulyI,1997untilSeptember6,2002;and2)WileyBros.
-AintreeCapital,LLC(CRD#3767)("Aintree")fromSeptember6,2002untilMay9,2008.
However,Spencer'sregistrationwithAintreewasterminatedonMay9,2008baseduponhisdischargefromemploymentwithAintreeforviolatingcompanypolicyandforviolating·FinancialIndustryRegulatoryAuthority("FINRA")[formerlyknownastheNationalAssociationofSecuritiesDealers("NASD")]ConductRule2370.
35.
Atalltimespertinentherein(andtothepresent),Spencerhasmaintainedaninsuranceproducerlicense(License#728225;NationalAssociationofinsuranceCommissioners("NAIC")#1245978).
6.
BeginninginoraroundDecemberof1997,SpencerbegansellingsecuritiesintheformofpromissorynoteSinamountsrangingfromonethousanddollars($1,000)toforty-thousanddollars($40,000)[SeeattachedExhibitB],withmaturitydatesrangingfromafewdaysuptooneyear.
7.
Spencersoldthesenotestoatleastseventy-six(76)peopleincludingfamilymembers,securitiesclientsandmembersofhischurch("NoteHolders")[SeeattachedExhibitB].
8.
ThepromissorynotessoldbySpencerwerenotregisteredorexemptedfromregistrationundertheAct.
9.
.
Inaddition,sinceSpencerdidnothavewrittenapprovalfromLMWWorAintree(thebroker-dealersthroughwhomhewasregisteredwithduringthetimesatissue)tosellthepromissorynotesandsincesaidpromissorynoteswerenotrecordedonthebooksandrecordsofLMWWorAintreeasrequiredbythetulespromulgatedpursuanttotheAct,Spencerwasnotregisteredtosellthepromiss01ynotesdespiteavalidsecuritiesregistrationforallsecuritiessalesthatwererecordedonthebooksandrecordsofLMWWorAintree.
10.
Spencermadematerial,unttuthfulstatementstotheNoteHoldersinordertoenticethemtoinvestmoneywithhim,suchas:(I)advisingthemthattheirmoneywasgoingtobepooledwithmoneyfromotherinvestorsandthateachofthemwouldreceivetheinterestrateasstatedintheirindividualpromissorynotes(saidinterestratesrangedfromfive(5%)tofifteen(15%)percent);4and(2)thatthenoteswereguaranteedbyhispersonalestatewhichtotaledoveroneandonehalfmilliondollars($1.
5M).
11.
SpenceralsoomittedmaterialfactsbyfailingtodisclosetotheNoteHolders,beforetheyinvestedwithhim:(I)howmanypromissorynoteshehadissuedthatwerestilloutstanding;(2)thetotalaggregateamountofthepromissorynoteshehadoutstanding;(3)howmanypromissorynoteshehadissuedthatwerepastdue;and(4)how111anypromissorynoteshehadissuedthatwerebeing"rolledover"andreissuedwiththeaccumulatedinterestaddedtothenoteandanewmaturitydatesetbecauseofhisinabilitytopaytheprincipalandaccruedinterest.
12.
SpenceralsoengagedinnumerousdishonestorunethicalpracticesundertheActby:(I)bon·owingmoneyfromacustomer;(2)bysellingsecuritiesthatwerenotapprovedbyorrecordedonthebooksandrecordsofLMWWorAintree;(3)byexecutingordersforthepurchaseorsaleofunregisteredsecuritiesthatwerenotexemptundertheAct;and(4)byviolatingrulesofanationalsecuritiesexchangeor·nationalsecuritiesdealersassociationofwhichSpencerwasanassociatedpersonwithrespecttoanycustomer,transactionorbusinessinthisstate.
13.
Spenceralsoengagedinfraudulent,coerciveordishonestpracticesand/ordemonstratedincompetence,untrustwmthinessorfinancialin·esponsibilityintheconductofbusinessinthisstateby:(I)engagingintheunregisteredsalesofunregisteredsecurities;(2)bydeceivingtheNoteHoldersaboutthenatureoftheirinvestmentsandthepromisedreturnontheirinvestments;(3)byconcealingfi:omtheNoteHoldersmaterialinformationwhichwouldhaveenabledthemtomakeinformeddecisionsabouttheirinvestments;and(4)byusingNoteHoldersmoneytopayoffotherNoteHoldersandnotinvestingalloftheNoteHolders'fundsintheinvestmentvehiclesaspresented5totheNoteHolders.
CONCLUSIONSOFLAW14.
PursuanttoTENN.
CODEANN.
§48-2-115(a),theresponsibilityforadministrationoftheActisupontheCommissioner.
TheTSDisthelawfulagentthroughwhichtheCommissionerdischargesthisresponsibility.
15.
PursuanttoTENN.
CODEANN.
§§56-1-101,etseq.
(the"Law"),placestheresponsibilityfortheadministrationoftheLawontheCommissioner.
TheTIDisthelawfulagentthroughwhichtheCommissionerdischargesthisresponsibility.
16.
TENN.
CODEANN.
§48-2-104(a)statesthatitisunlawfulforanypersontosellanysecurityinthisstateunless:(1)itisregisteredunderthispart;(2)thesecurityortransactionisexemptedund!
Jr§48-2-103;or(3)thesecurityisacoveredsecurity.
17.
TENN.
CODEANN.
§48-2-104(b)providesthat"Thecommissionermay,afternoticeandopportunityforahearingundertheUniformAdministrativeProceduresAct,compiledintitle4,chapter5,imposeacivilpenaltyagainstanypersonfoundtobeinviolationofthissection,oranyregulation,ruleororderadoptedorissuedunderthissection,inanamountnottoexceedtenthousanddollars($10,000)perviolation.
"18.
TENN.
CODEANN.
§48-2-109(a)providesthat"Itisunlawfulforanypersontotransactbusinessfi·omorinthisstateasabroker-dealeroragentunlesssuchpersonisregisteredasabroker-dealeroragentunderthispart.
"19.
TENN.
CODEANN.
§48-2-109(e)providesthat"Thecommissionermay,afternoticeandoppottunityforahearingundertheUniformAdministrativeProceduresAct,compiledintitle4,6chapter5,imposeacivilpenaltyagainstanypersonfoundtobeinviolationofthissection;orany.
regulation,ruleororderadoptedorissuedunderthissection,inanamountnottoexceedtenthousanddollars($10,000)perviolation.
"20.
TENN.
CODEANN.
§48-2-112(a)(2)(B)providesthat"Thecommissionermaybyorderdeny,suspend,orrevokeanyregistrationunderthispartifthecommissionerfindsthat:.
.
.
(2)Theapplicantorregistrant.
.
.
(B)haswillfullyviolatedorwillfullyfailedtocomp1ywithartyprovisionofthispartorapredecessorchapteroranyruleororderunderthispartorapredecessorchapter.
.
.
".
21.
TennesseeCodeAnnotated§48-2-112(a)(2)(G)states,inpertinentpart,thatthe·Commissionerbyordermaydeny,suspend,orrevokeanyregistrationunderthispartifshefindsthattheorderisinthepublicinterest,necessaryfortheprotectionofinvestors,andifshefindsthattheregistrant,orinthecaseofabroker-dealer,anyofficer,director,oranypersonoccupyingasimilarstatusorperformingsimilarfunctionshasengagedindishonestorunethicalpracticesinthesecuritiesbusiness.
22.
TENN.
CODEANN.
§48-2-116providesthatthecommissionermaymake,promulgate,amend,andrescindsuchrules,fotms,andordersasarenecessarytocarryouttheprovisionsofthisActaslongasanysuchrule,formororderisinthepublicinterest,necessaryfortheprotectionofinvestorsandconsistentwiththepurposesfairlyintendedbythepolicyandprovisionsoftheAct.
23.
Tenn.
Comp.
R.
&Regs.
tit.
Dep'tofCommerceandIns.
,ch.
0780-4-3-.
02(6)(b)statesthatitshallbedeemedasa"dishonestorunethicalbusinesspractice"byanagentunderTenn.
CodeAnn.
§48-2-112(a)(2)(G)toengageintheactivityof:(1)Borrowingmoneyorsecuritiesfromacustomer;.
.
.
(3)Effectingsecuritiestransactionswithacustomernotrecordedontheregular7booksorrecordsofthebroker-dealerwhichtheagentrepresents,unlessthetransactionsaredisclosedto,andauthorizedinwritingby,thebroker-dealerpriortoexecutionofthetransactions;.
.
.
(16)[e]Kecutingordersforthepurchaseorsaleofsecuritieswhichtheagentkneworshouldhavek~ownwerenotregisteredundertheActunlessthesecuritiesortransactionsareeltemptundertheAct;and(17)Violatinganyruleofanationalsecuritieseltchangeornationalsecutitiesdealersassociationofwhichtheagentisanassociatedpersonwithrespecttoanycustomer,transactionorbusinessinthisstate.
24.
FINRA[formerlyNASD]ConductRule2370statesthatnopersonassociatedwithamemberinanyregisteredcapacitymayborrowmoneyfromorlendmoneytoanycustomerofsuchmemberunless.
.
.
(3)thememberhaspre-approvedinwritingthelendingorborrowingarrangement.
25.
TENN.
CODEANN.
§48-2-12!
(a)(2)statesthatitisunlawfulforanyperson,inconnectionwiththeoffer,saleorpurchaseofanysecurityinthisstate,directlyorindirectly,to:.
.
.
(2)makeanyuntruestatementofamaterialfactoromittostateamaterialfactnecessaryinordertomakethestatementsmade,inlightofthecircumstancesunderwhichtheyaremade,notmisleading.
26.
TENN.
CoDEANN.
§56-6·II2(a)(2)providesthat"Thecommissionermayplace(lnprobation,suspend,revokeori·efusetoissueorrenewalicenseissuedunderthispartormaylevyacivilpenaltyinaccordancewithTENN.
CODEANN.
§§56-6-I55(b),56-6-112(e),or56-2-305(a)(2)"asapplicable,"ortakeanycombinationofthoseactions,foranyone(1)ormoreofthefollowingcauses:.
.
.
(2)Violatinganylaw,rule,regulation,subpoenaororderofthecommissionerorofanotherstate'scommissioner;"827.
TENN.
CoDEANN.
§56-6-112(a)(8)provides,inpe1tinentpart,that"Thecommissionermayplaceonprobation,suspend,revokeorrefusetoissueorrenewalicenseissuedunderthispartormaylevyacivilpenaltyinaccordancewithTENN.
CODEANN.
§§56-6-155(b),56-6-112(e),or56-2-305(a)(2)"asapplicable,"ortakeanycombinationofthoseactions,foranyone(!
)ormoreofthefollowingcauses:.
.
.
(8)Usingfraudulent,coercive,ordishonestpractices,ordemonstratingincompetence,untrustworthinessorfinancialiiTesponsibilityintheconductofbusinessinthisstateorelsewhere;"28.
ForanyofthepromissorynotesissuedpriortoDecember31,2002,TENN.
CODEANN.
§56-6-155(2000)wasineffect.
Inpertinentpart;TENN.
CODEANN.
§56-6-155(2000)stated:56-6155.
Groundsforsuspension,etc.
-Civilpenalty.
-(a)Thecommissionermaysuspend,revoke,orrefusetoissueorrenewanylicenseUJ1derthispartforanyone(1)ormoreofthefollowingcauses:(10)Beingdemonstrablyincompetent,untrustworthy,orfinanciallyirresponsible.
.
.
[.
](b)Jnadditiontoorinlieuofanydenial,suspension,orrevocationofalicensehereunder,thecommissionermayaccessacivilpenaltyagainstanypersonviolating·thispartinanamountnotlessthanonehundrecjdollars($100)normorethanonethousanddollars($1,000)foreachviolation:[Acts1988,ch.
1019,§25.
]29.
TENN.
CODEANN.
§56-6-155(2000)wasrepealedeffectiveJanuaryI,2003andwasreplacedbyTENN.
CODEANN.
§56-6-112(2002).
ForanyofthepromissorynotessoldafterJanuaryI,2003,butbeforeJune4,2008,TENN.
CODEANN.
§56-6-112(2002)stated,inpertinentpart:56-6-112.
Licensedenial,nonrenewal,suspensionorrevocation.
-(a)Thecommissionermayplaceonprobation,suspend,revokeorrefusetoissueor·renewalicenseissuedunderthispartormaylevyacivilpenaltyinaccordancewithsubsection(e)ortakeanycombinationofsuchactions,foranyoneormoreofthefollowingcauses:(8)Usingfraudulent,coercive,ordishonestpractices,ordemonstrating9.
.
incompetence,untrustworthiness,orfinancialirresponsibilityiniheconductofbusinessinthisstateorelsewhere.
.
.
(.
](e)Withrespecttoanypersonlicensedorrequiredtobelicensedunderthispart,andinadditiontoorinlieuofanyapplicabledenial,suspensionorrevocationofalicense,thecommissionerrnayassessacivilpenaltyagainstsuchpersoninanamountnotlesstha[n]onehundreddollars($100)normorethanonethousanddollars($1,000)foreachseparateviolationofastatute,mleororderpertainingtothesale,solicitationornegotiationofinsurance.
inthisstate.
Eachdayofcontinued·violationconstitutesaseparateviolation.
30.
TENN.
CODEANN.
§56-6-112(a)(l3)(e)(2002)wasreplacedbyTENN.
CODEANN.
§56-2-305(a)(2),effectiveJune4,2008.
ForanyofthepromissorynotessoldafterJune4,2008,TENN.
CODEANN.
§56-2-305(a)(2)states,inpertinentpart:56-2-305.
Violations-Commissioner'sorders-Penalties.
-(a)If,afterprovidingnoticeconsistentwiththeprocessestablishedby§4-5-320(c)andprovidingtheopportunityforacontestedcasehearingheldinaccordancewiththeUniformAdministrativeProceduresAct,compiledintitle4,chapter5,part3,thecommissionerfindsthatanyinsurer,person,orentityrequiredtobelicensed,permitted,orauthorizedbythedivisionhasviolatedany.
statute,mleororder,thecommissionermay,atthecommissioner'sdiscretion,order:.
(2)Paymentofamonetarypenaltyofnotniorethanonethousanddollars($1,000)foreachviolation,butnottoexceedanaggregatepenaltyofonehundredthousanddollars($100,000),unlesstheinsurer,person,orentityknowinglyviolatesastatute,ruleororderinwhichcasethepenaltyshallnotbemorethantwenty-fivethousanddollars($25,000)foreachviolation,nottoexceedanaggregatepenaltyoftwohundredfiftythousanddollars($250,000).
Thissubdivision(a)(2)shallnotapplywhereastatuteorrulespecificallyprovidesforothercivilpenaltiesfortheviolation.
Forpurposesofthissubdivision(a)(2),eachdayofcontinuedviolationshallconstituteaseparateviolation;and(3)Thesuspensionorrevocationofth~insurer'sperson's,orentity'slicense.
31;Theavermentsinparagraphsone-thirteen.
ofthisConsentOrder,constitutepracticesbyWilliamWalterSpencerwhichwouldprovidegroundsunderTENN.
CODEANN.
§48-2-l04(a)and(b)fortheentryofanorderofsanctions.
1032.
Theavefl!
lentsinparagraphsone-thirteenofthisConsentOrder,constitutepracticesbyWilliamWalterSpencerwhichwouldprovidegroundsunderTENN.
CODEANN.
§48-2-109(a)and(e)fortheentryofanorderofsanctions.
33.
Theavermentsinparagraphsone-thirteenofthisConsentOrder,constitutepracticesbyWilliamWalterSpencerwhichwouldprovidegroundsunderTENN.
CODEANN.
§48-2-112(a)(2)(B)and(d)fortheentryofanorderofsanctions.
34.
Theavefl!
lentsinparagraphsone-thitteenofthisConsentOrder,constitutepracticesbyWilliamWalterSpencerwhichwouldprovidegroundsunderTENN.
CODEANN.
§48-2-ll2(a)(2)(G),Tenn.
Comp.
R.
&Regs.
tit.
Dep'tofCommerceandIns.
,ch.
0780-4-3-.
02(6)(b),andFINRA[fonnerlyNASD]ConductRule2370fortheentryofanorderofsanctions.
35.
Theavennentsinparagraphsone-thhteenofthisConsentOrder,constitutepracticesbyWilliamWalterSpencerwhichwouldprovidegroundsunderTENN.
CODEANN.
§48-2-121(a)(2)fortheentryofanorderofsanctions.
36.
Theave1mentsinparagraphsone-thirteenofthisConsentOrder,constitutepracticesbyWilliamWalterSpencerwhichwouldprovidegroundsunderTENN.
CODEANN.
§56-6-112(a)(2),TENN.
CODEANN.
§§56-6-155(b),56-6-ll2(e)OR56·2-305(a)(2)asapplicablefortheentryofanorderofsanctions.
37.
Theavennentsinparagraphsone-thhteenofthisConsentOrder,constitutepracticesbyWilliamWalterSpencerwhichwouldprovidegroundsunderTENN.
CODEANN.
§56·6-112(a)(8),TENN.
CODEANN.
§§56-6-155(b),56-6-112(e)OR56-2-305(a)(2)asapplicablefortheentryofanorderofsanctions.
11ORDERNOW,THEREFORE,onthebasisoftheforegoing,andRespondent'swaiveroftherighttoahearingandappealundertheTennesseeSecuritiesAct,theTennesseeInsuranceLawandtheTennessee'sUnifonnAdministrativeProceduresAct,TENN.
CODEANN.
§§4-5-101etseq.
,and·Respondent's·admissionofjurisdictionoftheCommissioner,theCommissionerfindsthatRespondent,forthepurposeofsettlingthismatter,admitsthemattersherein,hasagreedtotheentryofthisOrderandthatthefollowingOrderisappropriate,inthepublicinterestandnecessaryfortheprotectionofinvestors.
.
ITISORDERED,pursuanttoTENN.
CODEANN.
§48-2-116(a)oftheTennesseeSecuritiesActandTENN.
CODEANN.
§56-6-112(a)oftheTennesseeInsuranceLawthat:I.
Respondent,WilliamWalterSpencer,ISORDEREDTOANDAGREEStofully·complywiththeTennesseeSecuritiesAct,asamended,andallrulespromulgatedthereunder;2.
Respqndent,WilliamWalterSpencer,ISORDEREDANDAGREEStoamendformU-4and/orU-5,pursuanttotheinstructionsofsaidf01msandasrequiredbytheFINRA,andtofiletheappropriateDisclosureRepottingPagetodisclos.
ethedetailsofthisaction;3.
Respondent,WilliamWalterSpencer,shallCEASEANDDESISTinanyfurtherconductasabroker-dealer,agentofabroker-dealer,investmentadviser,orinvestmentadviserrepresentativefi·omorinthestateofTennessee,beginningonthedatethisConsentOrderisexecutedbytheCommissionerfortheDepartmentofCommerceandInsurance;4.
Respondent,WilliamWalterSpencer,shallCEASEANDDESISTinconductingsecuritiestransactionsonbehalfofothersfrom,in,orintotheStateofTennessee,beginningonthe12datethisConsentOrderisexecutedbytheCommissionerfortheDepartmentofCommerceandInsurance;5.
Respondent,WilliamWalterSpencer,shallbePERMANENTLYBARREDfromapplyingfororseekingregistrationwiththeTSDasabroker-dealer,agentofabroker-dealer,investmentadviser,orinvestmentadviserrepresentative,beginningonthedatethisConsentOrderis·executedbytheCommissionerfortheDepartmentofCommerceandInsurance;6.
Respondent,WilliamWalterSpencer,shallbePERMANENTLYBARREDfromapplyingfororseekinglicensureasaninsuranceproducerwiththeTIDasaninsuranceproducer,beginningonthedatethisConsentOrderisexecutedbytheCommissionerfortheDepartmentofCommerceandInsurance.
7.
ITISORDERED,pursuanttoTENN.
CODEANN.
§48-2-116(a)oftheTennesseeSecuritiesActthat:Theagentregistration(CRD#1443074)heldbytheRespondent,WilliamWalterSpencer,isherebyREVOKED.
8.
ITISFURTHERORDERED,pursuanttoTENN.
CODEANN.
§56-6-112(a)oftheTennesseeInsuranceLawthat:Theinsuranceproducerlicense(License#728225),heldbytheRespondent,WilliamWalterSpencer,isherebyREVOKED.
9.
Respondent,WilliamWalterSpencer,ISORDERED.
TOANDAGREEStopayrestitutiontotheNoteHolders[SeeAttachmentItoDeedofTrust,includedinthisOrderbyreferenceandattachment],intheamountofonemillion,fivehundredandeighty-sixthousand,onehundredandthirty-sevendollarsandfifty-onecents($1,586,137.
5,1),tobepaidbytheexecutionandfilingoftheattachedDeedofTrustfortheBenefitofSpencerNoteHolders[SeeattachedExhibitA,13includedinthisOrderbyreferenceandattachment].
TheNoteHolderswillbepaidoutofthe.
.
.
residualproceedsofthesaleofthesubjectpropertyonapro-ratabasis,thedistributiontobepaidas·follows:initialdistributionwillbeapro-ratashareoftheavailableproceedsbasedontheprincipalamountinvestedbyeachNoteHolder[SeeattachedExhibitB]andadditionaldistributions,iffundsareavailable,shallbebasedonapro-ratashareoftheaccmedinterestdueonthepromissorynotes.
AnyNoteHoldermadewholebasedonapriorlienagainstthesubjectpropertyshallnotshareinthedistributionundertheDeedofTrustfortheBenefitofSpencerNoteHolders[SeeattachedExhibitA].
10.
RespondentherebyAGREESthatfailuretocomplywithalltherequirementsandprohibitionscontainedinthisOrdercanresultinfurtherenforcementactionbytheDivisions,theDepartmentofCommerceandInsurance,and/ortheStateofTennesseeinordertoenforcetheprovisionscontainedherein.
ITISORDEREDthatthisOrderrepresentsthecompleteandfinalresolutionof,anddischargewithrespecttoalladministrativeandcivil,claims,demands,actionsandcausesofaction·bytheCommissioneragainstWilliamWalterSpencerforviolationsoftheActallegedbytheTennesseeSecuritiesDivisionandtheTennesseeInsuranceDivisiontohaveocculTedwithrespecttothefactscontainedherein.
ThisConsentOrderisinthepublicinterestandinthebestinterestsoftheparties,andrepresentsacompromiseandsettlementofthecontroversybetweenthepartiesandisforsettlementpurposesonly.
Bythesignatureaffixedbelow,WilliamWalterSpencer,affhmativelystatesthathehasfreelyagreedtotheentryofthisConsentOrder,thathewaivestherighttoahearingonthe14mattersunderlyingthisConsentOrderandtoareviewoftheFindingsofFactandConclusionsofLawcontainedherein,andthatnothreatsorpromisesofanykindhavebeenmadebytheCommissioner,theDivisions,oranyagentorrepresentativethereof.
Theparties,bysigningthisConsentOrder,affirmativelystatetheiragreementtobeboundbythetermsofthisConsentOrderandaverthatnopromisesoroffersrelatingtothecircumstancesdescribedherein,otherthanthetennsofsettlementsetforthinthisConsentOrder,·arebindinguponthem.
.
ENTEREDthis/W'ih-dayof_e"",,M""A.
c'2009.
APPROVEDFORENTRY:LeslieA.
Newman,CommissionerDepartmentofCommerceandInsurance_1W:1'iLllit:.
am~w:::::al~te~rl.
.
.
.
Sp.
.
J.
e.
t.
n~ce~r~~_cye,~RespondentAssistantCommissionerforSecuritiesDepartmentofCommerceandInsurance1LTOillhiYLongabergerAttorneyforRespondent1109GlenwoodAve.
Nashville,TN37204(615)259-4141;;~E.
Lrryg~~~.
Ati.
~!
!
ll)tC[Jmmissio~e,··:.
DepartmentofCommerceandInsurance15'·cd~a.
l]aLBarbaraA.
Doak(#0158i1i)ChiefCounselSecuritiesDivisionDepartmentofCommerceandInsurance500JamesRobertsonParkway,2"dFloorNashville,TN37243(615)741-2199/.
\:.
~1,.
~EXHIBITA(idderforcash,andfreefromtheequityofredemption,thestatutoryrightofredemption,homestead,dower,statutoryorelectiverights,andallotherexemptionsofeverykind,whichareherebyexpresslywaive;andtheTRUSTEE,oritssuccessorintlust,isauthorizedtomakeadeedtothepurchaser.
Thecreditormaybidatanysaleunderthisconveyance.
GRANTORagreesthattheTRUSTEEmay,atanytimeafterdefaultinpaymentofprincipalandinterestorboth,enter·andtakepossessionofsaidproperty,andshallonlyaccountfornetrentsreceivedbyit.
IncaseofsaleunderthisDeedofTrust,theproceedsshallbeappliedbytheTRUSTEE:1"-Topay.
allthecostsandchargesofexecutingthistrust,includingAttomey'sfeesandthefeesoftheTRUSTEE,andtheexpensesofanylitigationwhichmayariseonaccountoftheexecutionandenforcementofthistrust,·orinconnectiontherewith·asaboveprovided;znd-Topaysaiddebt,totheNoteHolderslistedinAttachment1heretoonapro-ratabasisbeginningwithapro-ratadistributionbasedontheprincipalamountofindebtednesslessanypriorprincipalpayments;3''conveyedtotheTRUSTEEshallbevestedinsaidsuccessor.
Intheeventofasaleofsaidpropertyunderandbyvirtueofthistrust,theGRANTORandallpersonsholdingunderhimshallbeandbec9methetenantsatwillofthepurchaseroftheproperty,fromandaftertheexecutionanddeliveryofadeedtosuchpurchaser,saidtenancytobeterminatedattheoptionofsaldpurchaseruponfive(5)day'swrittennotice.
Itisfu1theragreedthattheTRUSTEE,oritssuccessor,mayexecutethepowerofsale,andotherpowersandrightsconfen·edhei·einbylaw,withoutgivingbondortakingoath.
DeedofTrustfortheBenefilofSpenserNoleHoldersPage4of5Whereverusedherein,thesingularnumbershallincludetheplural,thepluralthesingular,andtheuseofanygendershallbeapplicabletoallgenders.
If-IrIWitnessourhandshandatFranklin,Tennessee,thisb.
·dayof&J.
.
.
.
.
.
,wl~J,2009.
STATEOFTENNESSEECOUNTYOFWILLIAMSON))Onthis1&.
fr'dayof0aJt\'l\\((,2009beforemepersonallyappearedWilliamWalterSpencer,tomeknown(orprovedtomeonthebasisofsatisfactoryevidence)tobethepeisondescribedinandwhoexecutedtheforegoinginstrument,andacknowledgedthatheexecutedthesameashisfreeactanddeed.
IcertifythatIamaNotaryPublicauthorizedtoactandnowactingwithinandfortheStateandCountyabovementioned;andIhavesignedmynameandhavei.
~l!
Qj.
!
Cia!
sealhereon,thedaandyeaewritten.
~.
-~I·:IMycommissionexpires:0::PageSof5Attachment1toDeedofTrustInvestorNamePrincipalReturn%FeeDateofNoteAbernathySolon$1,500.
0010.
0%8129/2006AndersonEdwardandMargaret$10,000.
0010.
0%7/1511999AndrewsRebecca$4,000.
0010.
0%211212003AndrewsRebecca$7,500.
0010.
0%2118/2003ArmstrongDouglas$20,000.
009.
0%3/31/2005BartlettBarbara$25,000.
0010.
0%7/10/2007BartlettBarbara$40,000.
009.
0%6/1812008BartlettDouglasandBarbara$10,000.
0010.
0",1,6/30/2004BartlettDouglasandBarbara$10,000.
0010.
0%2110/2006BedfordShirley$5,000.
0010.
5%3/5/2002BedfordShirley$10,000.
0010.
5%5/1/2003BellamyJaredandAmy$5,000.
0010~0%4/21/2006BellamyJared$2,500.
0010.
0%6/3/2004BoydEdwin$25.
000.
009.
0%3122/2002BrinkerRonaldandSue$11,000.
0010.
0%9111/2007.
BrownPaulandEmma$3.
000.
0010.
0%1213/2003BrownPaulandEmma$5,000.
009.
0%9/13/2006BrownPaulandEmma$3,000.
0010.
0%7/16/2003BrownPaulandEmma$5,000.
009.
0%9/23/2002BrownPaulandEmma$10,000.
009.
0%9/1212008BrownPaulandErrima$5,000.
0010.
0%2121/2007BrowriLarry$5,000.
0010.
0%1213/2007BrownLarry$10,000.
0010.
0%2121/2007BrownLarry$5,000.
0010.
0%11/512007Brownlarry$5,000.
0010.
0%2120/2008Brownlarry$5,000.
0010.
0%1213/2004BrownLarry$5,000.
0010.
0%4/16/2004Brown.
Larry$5,000.
0010.
0%1213/2003BrownLarry$10,000.
009.
0%9/1212008Burkett/CurtisTommy/Kelby$3,300.
0010.
0%6/29/2006capraBrenda$8,000.
009.
0%9/17/2003InvestorNamePrincipalReturn%FeeDateofNoteChesterRoyandTammy$5,000.
00$400.
005/10/2006ChesterRoyandTammy$3,000.
0010.
0%or$1004/11/2007ChesterRoyandTammy$2,000.
0010.
0%or$1004/11/2007Cooper/Clark·Madie!
Bertha$6,020.
2510.
0%1112912006CostelloJames$10,000.
0010.
0%10/27/1999DacusJames·$5,000.
0010.
0%6/27/2006DaughertyPeggy$8,500.
0010.
5%11/17/2000DaughertyAlbert$7,000.
0010.
0%9/10/2001DaughertyAlbeit$7,000.
009.
0%9/2612006DaughertyAlbert$4,000.
0010.
0%7/26/2005DaughertyAlbert$6,000.
009.
0%214/2005DaughertyAlbert$6,000.
009.
0%11/17/2000Daugherty·Albert$7,000.
009.
0%8/9/2003DaughertyAlbert$5,000.
0010.
!
)%10/1211999DaughertyAlbert$4,000.
0010.
0%1.
12/2009EnglandJackandGeorgia$2,000.
0010.
0%817/2006.
FergusonKeithandDonna$25,000.
0010.
0%4/25/2008FletcherJoyce$2,500.
0011.
0%8/1/2000FletcherGrady$,1,000.
0011.
0%12128/2000FletcherGrady$1,000.
0011.
0%8/1/2000FletcherGrady$2,500.
0010.
5%5/1312000FletcherGrady$1,000.
00$25.
001/1512002GreenAlfredandNormalee$·3,500.
0011.
0%4/18/2000GreenAlfredandNormalee$15,000.
0012.
0%6/20/2002GreenAlfredandNormalee$7,000.
0011.
0%10/8/1997GreenAlfredandNormalee$20,000.
0011.
0%61311997GrossPatandJamie$10,000.
009.
0%8/15/2008GutshallGeraldandRebecca$5,000.
008.
0%3/19/2008HagertyEvelyn$'15,000.
0010.
0%8/8/2003HoganArnieandBetty$10,000.
0010.
0%8/16/2006HoganArnieandBetty$6,000.
0010.
0%9/212005HoganGee~·$6,000.
0010.
0%9/1/2005HoganGee~$20,000.
0010.
0%4/30/2003HolbertThomasandLena$2,000.
00$250.
0012111/2006HolbertThomas.
andLena$1,250.
0010.
0%7/6/2006LaddBetty$10,000.
0010.
0%4/3/2003InvestorNamePrincipalReturno/oFeeDateofNoteLaddBetty$30,000.
0010.
0%3131/2003LaddBetty$10,000.
0010.
0%3/4/2004LemmonsAlbertandPatsy$5,000.
0011.
0%4/27/2005LemmonsAlbertandPatsy$10,000.
0010.
0%1/2612004LemmonsAlbertandPatsy$10,000.
0010.
0%4/15/2004LoftisWarrenandSue$25,000.
0010.
0%2/5/2008LoftisWarrenandSue$5,000.
0011.
0%8128/2000LoftisWarrenandSue$3,500.
0012.
0%5/2312001LongGeorge$7,500.
005.
0%2/19/2008MarshallHueston$5,000.
0010.
0%9/6/2006MarshallEmily$5,000.
009.
0%7/14/2003McCoimellRussellandJean$8,250.
0010.
0%3/5/2005McConnellRussellandJean$40,000.
0010.
0%11/14/2005MillerWanza$5,000.
0010.
0%3128/2007Moran·Ann$5,000.
0010.
5%11/22/2001MoselyRobertandBeverly$15,000.
0011.
0%1/25/2001Pari2610.
0%2/312004Pari0011.
0%1/23/2002PewittMaudene$5,000.
00$500.
008/11/2006PewittMaudene.
$5,000.
0010.
0%8/24/2005PinkertonJasper$10,000.
0011.
0%7/10/2000PolkEdwardandNancy$10,000.
0010.
5%10/1311999PrattMary$10,000.
009.
0%8/25/2008PiattMary$25,000.
0010.
0%9/21/2007PrattMary$10,000.
0012.
0%10/29/2008PrattMarys·25,000.
0010.
.
0%8/20/2007RaganDwightandSheila$5,000.
009.
0%811312008ReasonoverAlisaandHarryandCamiile$26,000.
0010.
0%5/1/2007ReasonoverHarryandCamille$5,000.
0010.
0%5/5/2005ReasonoverHarryandCamille$8,000.
0010.
0%10/11/2005ReasonoverHarryandCamille$10,000.
0010.
0%5/19/2004ReasonoverHarryandCamille$25,456.
009.
0%10/31/2000ReasonoverHarryandCamille$5,000.
0010.
0%11/17/2004ReasonoverHarryaridCamille$12,000.
0010.
0%10/8/2003ReevesCharlesandIda$12,000.
009.
0%7/17/2006ReynoldsJohnandPatricia·$10,000.
009.
0%7/2/2004InvestorNamePrincipalReturn%FeeDateofNoteRileyThomasandAnne$4,000.
009.
0%2/24/2004RobertsonEdith$6,000.
0010.
0%5/27/1999RobinsonWilliamandMary$10,000.
009.
0%2/14/2007RogersJudy$10,000.
0010.
0"103/26)2004RogersJudy$20,000.
0012.
0%317/2001SherrodSidneyandChristine$5,000.
0010.
0%5/24/2006SmithMarvi.
e$3,000.
0011.
0%or$25012/2712001Snyder/GrossMartha/Patricia$5,000.
0010.
0%2/1512008SpencerBillie$6,000.
0012.
0%or$25d1/312006·SpencerBillieandEdgar$5,000.
0011.
0%6122/2000SpencerBillie$4,000.
0010.
0%12/312002SpencerJames$5,000.
0010.
0%6123/2005SpencerLouisandJoan$5,000.
0010.
5%4112/2002SpencerLouisandJoan$5,000.
0010.
0%10125/2004SpencerBille$5,500.
0012.
0%or$1508/27/2002StottsKeith$3,000.
009.
0%12/17/2001SullivanRose$2,000.
009.
0%9/10/2008SullivanRose·$5,000.
0012.
0%7/30/2001TaylorRalph$30,000.
0010.
0%10/15/2004TaylorRalph$20,000.
0015.
0%10/11/2005TayJorRalph$10,000.
0015.
0%10/24/2005TayJorRalph$15,000.
0010,0%10/15/2004TayJor,Jr.
John$5,000.
0010.
0%9/26/2001TaYlor,Jr.
John$3,500.
009.
0%11/26/2002TittleDiedra$8,'000.
009.
0%6/21/2006TrttleDiedra$2,000.
009.
0%6/30/2006TurnsGene$4,000.
0010.
0%2/10/1999TurnsGene$21,000.
0010.
0%5/11/2005WhiteheadJames$3,000.
009.
0%7/9/2008WhiteheadJatnes$12,000.
0010.
5%12/17/1997WhiteheadJames$6,000.
0010.
5%3129/1999Whitehead.
James$3,000.
009.
0%719/2008WhiteheadJames·$4,000.
0010.
5%2i11/1999WhiteheadJames$8,000.
0010.
5%8120/1999WhiteheadJames$5,000.
0012.
0%1/4/2000WhiteheadJames$10,000.
0011.
5%7111/2000InvestorNamePrincipalReturn%.
FeeDateofNoteWhiteheadJames$15,000.
00$150.
0010/3/2000WhiteheadJames$.
4,000.
0012.
0%or$100612212001WhiteheadJames$6,000.
0011.
0%11/27/2001WhiteheadJames$4,000.
0011.
0%or$1002120/2002WhiteheadJames$5,000.
0011.
0%5/15/2002WhiteheadJames$6,00Q.
OO10.
5%7/18!
2002WhiteheadJames$3,300.
0010.
5%or$5010/2112002WhiteheadJames$7,500.
0010.
5%121212002Whitehead.
James$8,000.
0010.
0%1/14/2003WhiteheadJames$8,000.
0010.
0%1/2212003WhiteheadJames$7,000.
0010.
5%212712003WhiteheadJames$.
4,500.
0010.
0%3/25/2003WhiteheadJames$4,000.
0010.
0%or$1007/25/2003WhiteheadJames$.
4,500.
00$50.
004/1712003WhiteheadJames$3,500.
00$50.
005/27/2003WhiteheadJames$3,000.
00$50.
006/24/2003WhiteheadJames$4,000.
00$50.
009/912003WhiteheadJames$3,500.
00$50.
009/2312003WhiteheadJames$.
2-,000.
0010.
5%or$5010/3/2003WhiteheadJames$4,000.
0010.
0%11/25/2003WhiteheadJames$15,000.
00$150.
0010/3/2000WhiteheadJames$7,000.
0010.
0%12118!
2003WhiteheadJames$2,000.
009.
0%3/2212004WhiteheadJames$3,500.
0010.
0%4/21/2004WhiteheadJames$4,500.
0010.
0%5/1312004WhiteheadJames$1,600.
0010.
0%6/312004Whitehead·James$5,000.
0010.
0%6/1112004WhiteheadJames$4,000.
0010.
0%7/14/2004WhiteheadJames$4,000.
0010.
0%8!
19/2004WhiteheadJames$5,000.
0010.
0%9/27/2004WhiteheadJames$4,000.
0010.
0%11/1612004Whitehead·James$1,500.
0010.
0%11/30/2004WhiteheadJames$4,000.
0010.
0%1/3/2005WhiteheadJames$2,000.
0010.
0%1/27/2005Whitehead·James$5,000.
0010.
0%3/23/2005WhiteheadJames$4,000.
00.
10.
0%4/21/2005InvestorNamePrincipalReturn%F~DateofNoteWhiteheadJames$4,000.
0010.
0%6n/2005WhiteheadJames$5,000.
0010.
0%.
6113/2005WhiteheadJames$5,000.
0010.
0%8/9/2005WMeheadJames$3,000.
0(!
10.
0%8/30/2005WhiteheadJames$4,000.
0010.
0%9/13/2005WhiteheadJames$5,000.
0010.
0%12/15/2005WhiteheadJames$4,000.
0010.
0%1/2312006WhiteheadJames.
$5,000.
0010.
0%.
2/612006WhiteheadJames$3,000.
0010.
0%3/9/2006WhiteheadJames$5,000.
0010.
0%3/27/2006WhiteheadJames$3,500.
0010.
0%8/7/2006WhiteheadJames$5,000.
0010.
0%10/10/2006.
WhiteheadJames$2,500.
0010.
0%11/29/2006WhiteheadJames$5,000.
0010.
0%12/13/2006WhiteheadJames$1,500.
0010.
0%12/26/2006WhiteheadJames$2,000.
0010.
0%1/2512007WhiteheadJames.
$4,000.
0010.
0%2/13/2007WhiteheadJames$5,000.
0010.
0%3119/2007.
WhiteheadJames.
$3,000.
0010.
0%5/11/2007WhheheadJames$1,200.
0010.
0%5126/2007WhiteheadJames$2,000.
0010.
0%6/12/2007WhiteheadJames$2,000.
0010.
0%7/5/2007WhiteheadJames$4,000.
0010.
0%7/2612007WhiteheadJames$2,000.
0010.
0%8/312007WhiteheadJames$4,000.
0010.
0%8/27/2007WhiteheadJames$5,000.
0010.
0%9/19/2007WhiteheadJames$7,000.
0010.
0%10/2412007Whitehead·James$6,000.
0010.
0%11/16/2007WhiteheadJames$6,000.
0010.
0%11/29/2007WhiteheadJames$5,000.
0010.
0%12/27/2007WhiteheadJames$10,000.
0010.
0%1/17/2008Whitehead·James$6,000.
0010.
0%3/3/2008WhiteheadJames$6,000.
009.
0%3/26/2008WhiteheadJames$2,500.
009.
0%7/29/2008WhiteheadJames$3,500.
008.
0%3/2/2009WhiteheadJames$1,000.
006/13/2008liwestorName.
PrincipalReturn%FeeDateofNoteWidickJoeandElaine$5,000.
0010.
0%7/2112006Wnliams/BurkettMyah/Tommy$1,600.
0010.
0%6129/2006WillisAnna$2,000.
00$250.
0011/1012006WillisAnna.
$6,000.
0011.
0%8124/2000WllsonCharlesandBobbye$10,000.
0010.
0%311912008$1,586,137.
51