SEC Rules Administrative Proceedings Against William Tak

Jack Humphrey, Regulatory journalist
January 13, 2012 /

The Securities and Exchange Commission has ordered that it would be appropriate and in the public interest that public administrative proceedings be instituted pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940 against William C. Tak.

In anticipation of the institution of these proceedings, the respondent has submitted an Offer of Settlement which the SEC has accepted. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the SEC, Tak consents to the entry of this order.

On the basis of this order and the respondent’s offer, the SEC finds that Tak joined California Wealth Management, Inc., d.b.a. IFC Advisory, an
investment adviser registered with the SEC until November 2010, in September 2006 as a senior vice president. From September 2006 until July 2009, Tak was a registered representative of a registered broker-dealer, until the firm terminated his association for failure to maintain on-site records as required by the firm’s written supervisory procedures.

From November 2009 to the present, Tak has been associated with another registered broker-dealer. Tak, age 43, is a resident of Newport Beach, California.

On January 5, 2012, a final judgment was entered by consent against Tak,
in the United States District Court for the Central District of California, Southern Division.

The SEC’s first amended complaint alleged that from June 2007 to at least November 2009, Tak sold securities interests in an investment fund,
Homestead Properties, L.P., that raised over $9.8 million from 36 investors, at least 33 of whom were between 60 and 97 years old at the time they invested.

Tak sold the Homestead offering to at least 29 of the 36 investors. The complaint alleged that Tak misrepresented to investors that Homestead would use a registered broker-dealer to sell interests in Homestead to investors, and that the source of Homestead’s distributions to investors would originate or relate in some way to Homestead’s accrued net profits.

Instead, Homestead did not sell interests through a broker-dealer and thus had no oversight or supervision of the offering from a broker-dealer. Homestead also had no accrued net profits, and thus paid investor distributions with money from investors’ capital contributions.

Lastly, the complaint alleged that Tak sold unregistered securities, and that he was not associated with a registered broker-dealer for purposes
of selling the Homestead offering.

In view of the foregoing, the SEC deems it appropriate and in the public interest to impose the sanctions agreed to in Tak’s Offer.

Any reapplication for association by the respondent will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including any
disgorgement ordered against the respondent, whether or not the SEC has fully or partially waived payment of such disgorgement; any arbitration award related to the conduct that served as the basis for the SEC order; any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the SEC order.

 

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