Timothy Tilton Ayre of New York New York a stockbroker formerly employed by Spencer Edwards Inc. has been charged by Financial Industry Regulatory Authority (FINRA) in a Complaint alleging that Ayre defrauded customers in reference to their investments in Rocky Mountain Ayre Inc. Department of Enforcement v. Timothy Tilton Ayre Disciplinary Proceeding No. 2016049307801 (Sept. 11, 2018).
According to the Complaint, between January 2013 and October 2016, Ayre sought for customers to make investments in Rocky Mountain Ayre Inc. (RMTN), a public company. Apparently, serious misstatements had been made by Ayre within RMTN’s public filings, and unregistered cryptocurrency securities had been created, offered and sold while Ayre represented the investment as being the first minable coin that had been backed by marketable securities.
The Complaint stated that as RMTN’s president and director, Ayre was responsible for overseeing the accuracy of public disclosures. Apparently, Ayre also possessed the majority of the RMTN shares, and the shares were traded over the counter on the Pink Market of the over-the-counter markets group.
The Complaint further alleged that during the January 2013 and October 2016 time period, RMTN’s business agenda had been falsely represented by Ayre in many disclosures made on the Pink Market. Ayre purportedly neglected to identify important information concerning RMTN’s transaction involving the establishment of the cryptocurrency backed by five hundred million shares of RMTN. The Complaint then alleged Ayre to have falsified the financial statements of RMTN in reference to the company’s asset valuations.
Consequently, FINRA Department of Enforcement alleged that Ayre’s conduct was violative of FINRA Rule 2010, Securities Exchange Act of 1934 Section 10(b), and Securities and Exchange Commission (SEC) Rule 10b-5.
The Complaint also alleged that in June of 2015, a cryptocurrency called HempCoin had been acquired by RMTN and then repackaged as a security that would be sold to the public. In this regard, RMTN reportedly issued five hundred million common stock shares in order to support the coins that the public would be offered.
HempCoin was seemingly described by Ayre as the first currency in the world to represent ownership of equity in a company that was publicly traded. Each coin had been apparently marketed as being the same value as one-tenth of a common stock share of RMTN. The Complaint stated that Ayre hoped for there to be demand for the HempCoin securities, which he believed to be necessary for raising the value in a company that had otherwise been worthless according to FINRA.
The Complaint stated that the Securities and Exchange Commission had never been provided a registration statement for HempCoin securities. Those securities were also reportedly not exempt from the registration requirements. The Complaint stated that Ayre contravened Securities Act of 1933 through accessing capital markets and soliciting and selling the unregistered securities; conduct FINRA alleged to be violative of FINRA Rule 2010.
Moreover, Ayre allegedly took part in selling RMTN convertible debt which totaled $205,100.00, in addition to effecting several other transactions that concerned over five hundred million RMTN common stock shares. Those transactions, including Ayre’s involvement in the HempCoin security solicitation, offers and sales, were apparently never disclosed by Ayre to Spencer Edwards.
The Complaint stated that Ayre’s undisclosed private securities transactions all occurred during the time that he was employed by Spencer Edwards. Spencer Edwards’ written supervisory procedures required Ayre to inform the firm concerning potential transactions and the broker’s role in the transactions beforehand. Consequently, FINRA Department of Enforcement alleged that Ayre sold away from the firm in violation of FINRA Rules 2010 and 3280 and National Association of Securities Dealers (NASD) Rule 3040.
Ayre was discharged from Spencer Edwards Inc. on March 18, 2016 based upon allegations that he engaged in undisclosed private securities transactions and outside business activities, and made misrepresentations concerning a public company’s asset securitizations.
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