In the Matter of Kunz
Securities and Exchange Commission
Exchange Act Release No. 45290 (Jan. 16, 2002)
VesCor Capital Corporation sold unregistered securities in Nevada until a 1994 settlement with the state required rescission offers to prior purchasers, letting them reinvest in accrual notes, monthly notes, or third-party mortgages; VesCor's rescission memoranda explained the proceeds would fund VesCor's business expansion. Kevin D. Kunz (defendant) discussed these memoranda with investors without verifying how many were unaccredited, and NASD found the memoranda misrepresented and omitted material facts about VesCor's finances, sanctioning Kunz for Regulation D violations. Kunz appealed to the SEC, arguing the offerings independently qualified for a Regulation D exemption.
Whether integrated offerings are entitled to an SEC Regulation D exemption from registration.