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Minnesota Securities Attorneys: What Every Minnesotan Needs to Know

Minnesota Investment Scams: Why You May Need a Minnesota Securities Attorney

Minnesota Investment fraud can happen anywhere—even among Minnesota’s 10,000 lakes. When investors invested in the Wayzata-based company Dakota Plains Holdings, Inc., no one could have predicted that they would fall victim to a complex stock manipulation scheme. Ryan Gilbertson founded Dakota Plains Holdings, Inc., a company based in Wayzata, Minnesota that operated a transloading facility in New Town, North Dakota. Along with Douglas Hoskins, he was convicted on June 26, 2018 of wire fraud, securities fraud, and conspiracy to commit securities fraud in conjunction with a scheme in which he artificially inflated the stock price, according to a U.S. Department of Justice press release.

How did this happen? In structuring Dakota Plains, Ryan Gilbertson and Douglas Hoskins “concealed their involvement in the company by installing their fathers as the company’s executives,” according to the DOJ’s press release. The DOJ’s press release goes on to state that “[r]ather than capitalize the company at the outset, [Gilbertson] caused the company to issue $9 million in promissory notes to himself and other corporate insiders.” Ryan Gilbertson quickly caused the company to go public via a reverse merger with a company known as Malibu Club Tan, “a publicly traded shell company that operated a single defunct tanning salon in suburban Salt Lake City, Utah,” according to the DOJ press release. In the 20 days following this reverse merger, Ryan Gilbertson, Douglas Hoskin, and others manipulated the stock price, which increased from 50 cents to $11.30 per share. To do this, Gilbertson enlisted a Minneapolis-based broker, Nicholas Shermeta (CRD#: 2414010), to purchase securities at the inflated price of $12 per share. Formerly a registered representative with Norland Securities, Inc. (CRD#: 40258), Nicholas Shermeta has since been barred from the securities industry by FINRA, according to his BrokerCheck report accessed on October 9, 2019. Ryan Gilbertson and other shareholders received a $32.8 million bonus following the 20-day period alone, according to an SEC press release. Douglas Hoskins made $125,000 and spent most of it on a polo pony.

Because of this unbridled greed, Minnesota investors were harmed. This case illustrates the startling reality that financial fraud can happen anywhere. But investors can protect themselves by educating themselves and availing themselves of the resources of the Minnesota Department of Commerce, which regulates securities in Minnesota.

How Minnesota Securities Regulators Help Investors Help Themselves

The most important steps that Minnesotans can take to protect themselves from stock fraud in Minnesota are to educate themselves about securities and investment fraud and retain a Minnesota securities attorney. The Minnesota Department of Commerce oversees the regulation of securities in Minnesota and provides resources for Minnesotans to evaluate the merits of different investment opportunities. Per Minnesota Statute § 80A.4, all securities must be registered with the State, unless they are exempt from registration or federal covered securities. Yet just because a securities offering is registered with the state doesn’t mean that it is a good investment.

As part of its mission of securities regulation and consumer protection, the Minnesota Department of Commerce helps investors avoid investment scams. One particular focus of the agency is preventing senior financial exploitation. In providing resources to elderly investors, the Minnesota Department of Commerce urges friendly Minnesota seniors to check their politeness at the door when speaking to those pitching unsolicited investment opportunities over the phone. Investors should stay in control of their finances—and the situation—by only investing in opportunities that they fully understand.

The Minnesota Department of Commerce urges investors who have questions or concerns about an investment to contact the agency at (651) 539-1600. But a statewide securities regulator can only do so much; to recover your funds, you need a securities attorney.

What Makes Us the Right Attorneys?

We bring the benefit of inside knowledge, which makes us different. Our securities attorneys have years of experience defending brokerage firms against investor claims; now, every securities attorney in our firm works exclusively on behalf of investors. Tapping into years of working for the “enemy,” our attorneys advocate and fight for investors.

Most securities complaints are not adjudicated in court; instead, they are heard in binding arbitration before a FINRA panel. We excel here. While we cannot guarantee success, our securities attorneys have recovered millions of dollars on behalf of our clients. Our excellent record speaks for itself. Both of our founding partners are SuperLawyers®, and our firm has received various industry awards—the Avvo Client’s Choice Award for Arbitration, for instance, as well as a “Preeminent” rating by Martindale-Hubbell. Our attorneys are regularly quoted in the media on investment-related issues, appearing in trade publications and national media, including the Wall Street Journal and ABC News.

Next Steps for Harmed Minnesota Investors

Greed knows no boundaries, and Minnesota has been—and will continue to be—the site of investment scams harming hard-working Minnesotans from the Twin Cities to Duluth to Mankato to Stillwater and everywhere in between. If you’re a Minnesota investor and have concerns about your investments or about broker fraud in Minnesota, don’t hesitate to contact a securities attorney. Call (877) 238-4175 or email info@fkesq.com for your free consultation with the securities attorneys of Fitapelli Kurta.