Tile venture faces investment charges
The Daily Inter Lake
A Bigfork business and four individuals have been ordered to stop violating the Montana Securities Act amid allegations that 22 investors have been defrauded of $1,156,750 since 1998.
The venture, called Style N? Tile, promoted itself as a manufacturer of decorative, kiln-fired tile murals for bathrooms and kitchens, featuring art work by famous artists such as Vincent Van Gogh and Norman Rockwell, according to a press release issued Monday by Montana State Auditor John Morrison.
Morrison?s office issued a cease and desist order last week against four principles in the venture, Fredrick ?Fritz? Keck, Sydnee Keck, Louise Tidwell and James Coolidge.
Preceding that order was a Notice of Proposed Agency Disciplinary Action and Opportunity for Hearing complaint against the same people, alleging they ?committed securities fraud when they made material omissions and misrepresentations to at least 22 investors of Style N? Tile, LLC.?
The document alleges that in 1998, Fritz Keck started soliciting investors for the venture.
?Most of the investors received promissory notes that were not registered with the state of Montana?s Auditor?s Office,? the release states. ?As the promissory notes came due, instead of paying terms of the notes, Style N? Tile rolled the investor?s funds into new promissory notes or convinced the investor to convert their note into an LLC membership interest.?
The Auditor?s Office also alleges that through numerous letters and e-mails, the four respondents ?made false promises that misled investors about the investment?s potential.
?For example, the Auditor?s action alleges Fritz Keck told one investor that he would get his investment back within 10 to 20 months, if not sooner,? the release continues. ?Additionally, the action alleges Fritz Keck told numerous investors that in the event of his death, investors would receive their investment money back because each investor was named on his personal life insurance policy. The Auditor?s action alleges no such life insurance policy exists.?
The Auditor?s Office is seeking restitution, including 10 percent interest annually, for each of the investors, as well as a fine of $5,000 for each alleged violation of the Montana Securities Act.
The 22 investors cited in the auditor?s 16-page action are not identified. The Inter Lake was unable to reach the four respondents in the case: A listed number for the Kecks was disconnected; there is no listing for Coolidge; and there was no response to a message left for Tidwell.
?Violating securities law is a serious matter and registration requirements have an important consumer protection purpose,? Morrison states in the press release. ?Montanans must use caution when deciding where to invest their hard-earned dollars. I encourage any resident who has been offered a questionable investment to contact my office. We rely on these reports to find and take action against individuals who should not be offering financial products in or from Montana.?
Morrison is urging anybody who has been solicited to invest in Style N? Tile to notify the Auditor?s Office by calling 1-800-332-6148 or 406-444-2040.
Reporter Jim Mann may be reached at 758-4407 or by e-mail at jmann@dailyinterlake.com