UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 94877 / May 9, 2022

ADMINISTRATIVE PROCEEDING

File No. 3-19266

:

In the Matter of

:

:

Foundations Asset Management,

:

LLC, Michael W. Shamburger, and :

Rob E. Wedel,

:

:

Respondents.

:

NOTICE OF PROPOSED PLAN OF

DISTRIBUTION AND

OPPORTUNITY FOR COMMENT

Notice is hereby given, pursuant to Rule 1103 of the United States Securities and

Exchange Commission’s (“Commission”) Rules on Fair Fund and Disgorgement Plans

(“Commission’s Rules”), 17 C.F.R. § 201.1103, that the Division of Enforcement has submitted

to the Commission a proposed plan of distribution (the “Proposed Plan”) for the distribution of

monies paid in the above-captioned matter.

On July 24, 2019, the Commission issued an Order Instituting Administrative and Ceaseand-Desist Proceedings Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of

1934 and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings,

and Imposing Remedial Sanctions and a Cease-and-Desist Order (the “Order”)1 against

Foundations Asset Management, LLC (“FAM”), Michael W. Shamburger (“Shamburger”), and

Rob E. Wedel (“Wedel”) (collectively, the “Respondents”). In the Order, the Commission found

that conflicts of interest were not properly disclosed, and that broker-dealer registration

violations were committed by registered investment adviser FAM, and its two principals,

Shamburger and Wedel. From May 2013 through June 2016, FAM improperly received

approximately $254,000 in compensation from private real estate fund Alaska Financial

Company III LLC (“AFC III”) and AFC III’s manager, McKinley Mortgage Co. LLC

(“McKinley”), while acting as an unregistered broker. FAM, through Shamburger and Wedel,

solicited clients and recommended that they invest approximately $12 million in AFC III

promissory notes. The Commission further found that FAM had two undisclosed compensation

agreements with McKinley regarding its clients’ AFC III investment: compensation calculated as

a percentage of an initial investment and trailing fees based on FAM client investments that

remained with AFC III each quarter. The Commission also found false statements and

misleading statements in ADV forms that FAM, through Shamburger, filed with the Commission

between March 2014 and March 2015 regarding the compensation it received for selling AFC III

1

Securities Act Rel. No. 86446 (July 24, 2019).

securities and advising FAM clients. In total, the Commission ordered the Respondents to pay

$253,784.00 in disgorgement, $25,163.00 in prejudgment interest, and $160,000.00 in civil

money penalties, of which $114,000 of the disgorgement was deemed satisfied by the

undertaking contained in paragraph 30 of the Order for a total of $324,947.00, to the

Commission. The Commission also created a Fair Fund, pursuant to Section 308(a) of the

Sarbanes-Oxley Act of 2002, so the penalties paid, along with the disgorgement and interest

paid, can be distributed to harmed investors (the “Fair Fund”).

The Fair Fund includes the $324,947.00 paid by the Respondents. The assets of the Fair

Fund are subject to the continuing jurisdiction and control of the Commission. The Fair Fund

has been deposited in an interest-bearing account at the U.S. Department of the Treasury’s

Bureau of the Fiscal Service, and any interest accrued will be added to the Fair Fund.

OPPORTUNITY FOR COMMENT

Pursuant to this Notice, all interested persons are advised that they may obtain a copy of

the Plan from the Commission’s public website at http://www.sec.gov/litigation/fairfundlist.htm.

Interested persons may also obtain a written copy of the Proposed Plan by submitting a written

request to Allison Moon, United States Securities and Exchange Commission, 100 F Street, NE,

Washington, DC 20549-5876. All persons who desire to comment on the Proposed Plan may

submit their comments, in writing, no later than thirty (30) days from the date of this Notice:

1.

to the Office of the Secretary, United States Securities and Exchange

Commission, 100 F Street, NE, Washington, DC 20549-1090;

2.

by using the Commission’s Internet comment form

(http://www.sec.gov/litigation/admin.shtml); or

3.

by sending an e-mail to rule-comments@sec.gov.

Comments submitted by email or via the Commission’s website should include “Administrative

Proceeding File No. 3-19266” in the subject line. Comments received will be publicly available.

Persons should submit only information they wish to make publicly available.

2

THE PROPOSED PLAN

The Net Available Fair Fund2 is comprised of the $324,947.00 in disgorgement,

prejudgment interest, and civil money penalties paid by the Respondents, plus interest and

income earned thereon, less taxes, fees, and expenses. The Proposed Plan provides for the

distribution of the Net Available Fair Fund to investors in AFC III promissory notes during the

Relevant Period and who suffered a Recognized Loss as calculated by the methodology used in

the Plan of Allocation in the Proposed Plan.

For the Commission, by the Division of Enforcement, pursuant to delegated authority.3

Vanessa A. Countryman

Secretary

2

All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Proposed

Plan.

3

17 C.F.R. § 200.30-4(a)(21)(iii).

3