The Ohio Division of Securities has issued a cease and desist order against a Columbus man and his financial firm, accusing them of illegally engaging in the sale of unregistered securities and investments.
The division issued the order following an investigation into the activities of Columbus resident Clarence Shaw and his limited liability corporation, Syntax Financial Group, whose business address is listed as an office suite in a building at 100 E. Campus View Blvd. on Columbus’ Northwest Side, just north of Worthington off the U.S. 23 and Interstate 270 interchange.
The order was issued on March 30 and determined to be “necessary or appropriate in the public interest or for the protection of investors” under the Ohio Securities Act, according to the division, which is part of the Ohio Department of Commerce.
Phone numbers listed online for Syntax Financial Group were disconnected or responded with a busy signal when The Dispatch attempted to reach Shaw and the company for comment. An email sent by The Dispatch to Shaw’s listed email address at Syntax was returned as undeliverable.
The division investigation, which began last year, found that Shaw and Syntax Financial violated state law by making false representations to illegally sell unregistered securities and investments. The division attempted to notify Shaw and Syntax Financial by certified mail and electronically in October and December, respectively, of its intent to issue the order to cease operations, but without success.
A classified legal notice to Shaw and Syntax Financial published in The Dispatch gave them until May 19 to challenge the cease and desist order by filing a notice of appeal with Franklin County Common Pleas Court and the division, stating only that the agency’s order was not supported by reliable evidence. As of May 20, there was no record in Common Pleas Court online filings of any response from Shaw or Syntax Financial.
Shaw, whose last known registered address was a downtown Columbus apartment, registered Syntax Financial Group as an Ohio limited liability company with the Ohio Secretary of State on March 19, 2021. Neither Shaw nor Syntax held a securities dealer, securities salesperson, investment adviser, or investment adviser representative license in Ohio, the state said, and Syntax has not filed a securities registration or an exemption from registration requirements.
Division investigators found that one victim, a Georgia resident identified only by the initials D.K., was introduced to Syntax Financial Group and Shaw by an acquaintance in an Atlanta area entrepreneur group, identified only as L.G.
L.G. said he was an investor with Shaw and Syntax Financial and was getting great results, the division investigation found. In May 2021, D.K. attended a webinar Shaw put on in which Shaw said Syntax Financial lent funds to other businesses and that purchased real estate on behalf of Syntax Financial.
D.K. told investigators that Shaw said there was a “marketing pool” program fund that used investor capital to secure funding from other lenders to purchase real estate, division documents state. As a result of Shaw’s representations, the division reported that D.K. on July 30, 2021, invested $5,000 with Syntax Financial by transferring the funds to the firm’s Fifth Third Bank account through Zelle, an online person-to-person payment platform.
Two days later, the division said Shaw and Syntax Financial sent D.K. a contract by email titled “Equity Pool Agreement,” which stated that D.K. had invested $5,000 as a “marketing campaign partner” and that D.K.’s guaranteed minimum return on investment as profit share for the 90-day campaign duration would be $10,000.
Prior to D.K.’s investment of $5,000, the division reported that Shaw and Syntax Financial only had $9.72 in their bank account. Between July 10, 2021, and Sept. 9, 2021, no additional deposits were made into that bank account, and the $5,000 D.K. put in was used “for Shaw’s personal expenses,” the division investigation found.
Meanwhile, D.K. had met C.T., a New Jersey resident, through a Facebook credit repair group and told C.T. about the investment she had made with Syntax Financial. According to the securities division, Shaw informed D.K. and C.T. that they were raising funds to operate a call center that would be used to generate leads for Syntax Financial, and investors would receive a return on investment of 30% annually.
C.T. was told she would receive a return on investment of $1,500 to $3,000, division records state. She invested a total of $8,000 with Shaw and Syntax Financial in two transactions of $4,000 each, one on Sept. 27, 2021, and another on Oct. 7, 2021.
D.K. invested another $8,000 with Shaw and Syntax Financial toward the call center on Sept. 28, 2021, with the understanding of a 30% return on investment, division records state. That same day, $6,400 was wired from Syntax Financial to Outbounders.com, an outbound call center company in the Philippines, the division reported.
The remainder of the funds invested with Syntax Financial was “used for Shaw’s personal expenses,” the division investigation found. Shaw spent C.T.’s funds on purchases at Uber Eats, Save-A-Lot, and through ATM withdrawals.
Shaw and Syntax Financial stopped returning phone calls and text messages from D.К.and C.T., neither of whom received repayment of the principal or interest on their investments. They later discovered Shaw had criminal convictions and evictions.
The division investigation reported that Shaw has a criminal conviction in Franklin County Court Common Pleas for two felony counts of sexual battery following his guilty plea on Feb. 25, 2003, and was sentenced to three years in prison on each count for a total of six years.
In addition, the division reported that Shaw had civil judgments against him in Franklin County Municipal Court for $2,441.76 and $1,832.96, respectively, and his wages were garnished. He also had a judgment against him in Franklin County Common Pleas Court for failure to pay state income taxes of nearly $825. He was twice evicted in the past from rental units in county Municipal Court proceedings.
This article originally appeared on The Columbus Dispatch: Ohio securities regulators issue cease and desist order against Columbus firm
Reporting by Jim Wilhelm, Columbus Dispatch / The Columbus Dispatch
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