William Clyde Scott and his company, Legacy Planning Masters, Inc., both of Colorado Springs, have been issued a cease and desist order by Colorado Securities Commissioner Gerald Rome for alleged violations of the Colorado Securities Act.
The order is in response to free lunch events that Scott offered in 2009, so he could solicit investors with the promise of maximizing their retirement funds.
“There is no time limit for us to investigate a matter like this,” Rome said. “We are not aware of any other activity [Scott] was involved in that potential investors should know about.”
The cease and desist order lists violations of the Colorado Securities Act in the form of misrepresentation and omission of material facts.
Scott is alleged to have convinced investors to turn over funds for promissory notes, and at least one of those investors was solicited through Legacy Planning Masters’ free lunch event, which was called “A Cruise to a Better Life.” Scott claimed he would increase those investors’ assets via undisclosed “estate transfers” and “giftings” to unnamed nonprofits, according to a news release from the Division of Securities, which is part of the Colorado Department of Regulatory Agencies.
“There is nothing wrong with free lunch seminars, but people need to be very careful,” Rome said. “The problem we have is that it’s a tool that can be used by scam artists and con men to sell a fraudulent service. It’s a way to find potential victims.”
In the press release, Rome added, “Something about the setting and receiving a free meal elicits a need to reciprocate by handing over funds to whoever makes the pitch, and this can be particularly dangerous for investors already in retirement years who can ill afford to lose money.”
While soliciting funds, Scott also failed to disclose that a Colorado investor who had lost $80,000 to him had previously sued and won a judgment for $225,000 — which Scott still has not paid. Scott also did not disclose that he had used the majority of investors’ funds for his personal expenses not related to their investment.
“He needs to disclose all of that to potential investors,” Rome said. “Somebody had sued him on a private matter that we had no involvement in, but he needs to make that clear.”
Scott and Legacy Planning Masters were not fined, and the process is complete, Rome said.
Since Scott’s activity hadn’t taken place since 2009, why issue the cease and desist order now?
“There are two reasons,” Rome said. “One, this tells him there is an official order in place and not to do it again. Two, if he does it again, somebody who Googles his name will likely find this judgment and be better informed to make a decision.”
Scott and Legacy Planning Masters agreed to the entry of the order without admitting or denying the Division’s allegations. The order requires them to immediately cease all conduct in violation of the Colorado Securities Act.