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Editor's note: The original version of this article falsely reported that Carlson and his firm is accused of stealing $18 million from investors. This is not accurate. The original version of this article further stated that Carlson and his firm were banned from operating in North Dakota, which is not completely accurate. Instead, Carlson’s investment advisory registration has been temporarily suspended, pending further hearing or other resolution of the matter.
BISMARCK — A North Dakota-based investment adviser and his firm have been ordered to cease and desist following several alleged violations of state securities laws.
Jeremy L. Carlson and his Fargo-based firm, Jamieson Capital Financial , are accused of "taking custody of investor funds, acting as an unregistered broker-dealer and agent, breach of fiduciary duty, unlawful conduct of an investment adviser and engaging in fraudulent practices under the Securities Act," according to a Monday, July 18, news release from the North Dakota Securities Department.
Securities Commissioner Karen Tyler also called for the immediate suspension of Jamieson Capital Financial's registration. Carlson is no longer registered as a securities professional in North Dakota and is temporarily suspended from operating as an investment advisor in the state, the release said.
According to the release, the department initiated its investigation into Carlson and Jamieson after a routine examination found "numerous deficiencies in the business conduct of the firm."
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To begin, Carlson "solicited and raised money from investors for numerous private funds he controlled," the release said. The disclosed fund objectives were to make investments in real estate, oil and gas, digital assets and medical marijuana.
Subpoenaed bank records indicated Carlson took custody of at least $17,780,000 worth of client funds, which is illegal under the Securities Act. Carlson subsequently paid himself and other unregistered individuals and entities 3% commissions for sales related to his private funds.
While unregistered, Carlson is said to have paid himself and his firm at least $338,000 in commissions on these sales in addition to the management fees he charged as an adviser. He also used a cryptocurrency exchange which is not available in the United States to pay other unregistered individuals management fees and trade digital assets with client funds.
Further, Carlson engaged in borrowing and lending with his privately controlled funds, lending money to individuals and businesses. This behavior was in conflict with the use of proceeds purposes that were detailed to investors, the department said.
Lastly, Carlson is said to have used client funds to make payments in excess of $3.9 million to acquire ownership in a medical marijuana business. According to the securities department, he did so without the execution of a purchase agreement or regulatory approval from the North Dakota Department of Health. Tax department records showed Carlson filed paperwork to claim angel fund tax credits for the purchase.
In a second order also announced Monday, Tyler demanded Carlson and several private funds stop issuing membership interests to investors and cease and desist from other Securities Act violations.
In response to the accusations and suspension, Carlson offered the following statement through his lawyer, Andrew Parker of Minneapolis-based Parker Daniels Kibort LLC:
"Mr. Carlson understands the gravity and seriousness of the State’s concerns in this regulatory matter. While he and Jamieson Capital have requested a hearing, they are working cooperatively with the North Dakota Securities Division to reach a mutually agreeable resolution, in the best interests of the investors."
