# UNITED STATES OF AMERICA > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3Af103f0215c182975 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 95255 / July 12, 2022 ADMINISTRATIVE PROCEEDING File No. 3-19266 : In the Matter of : : Foundations Asset Management, : LLC, Michael W. Shamburger, and : Rob E. Wedel, : : Respondents. : ORDER APPROVING PLAN OF DISTRIBUTION 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’ AFCIII 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 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 1 Securities Act Rel. No. 86446 (July 24, 2019). 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. On May 9, 2022, the Division of Enforcement, pursuant to delegated authority, published a Notice of Proposed Plan of Distribution and Opportunity for Comment (“Notice”),2 pursuant to Rule 1103 of the Commission’s Rules on Fair Fund and Disgorgement Plans (“Commission’s Rules”);3 and simultaneously posted the Proposed Plan of Distribution (the “Proposed Plan”). The Notice advised interested persons that they could obtain a copy of the Proposed Plan from the Commission’s public website or by submitting a written request to Allison Moon, United States Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-5876. The Notice also advised that all persons desiring to comment on the Proposed Plan could submit their comments, in writing, within 30 days of the Notice. The Commission received no comments on the Proposed Plan during the comment period. The Proposed Plan provides for the distribution of the Net Available Fair Fund4 to 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 Plan. The Division of Enforcement now requests that the Commission approve the Proposed Plan. Accordingly, it is hereby ORDERED, pursuant to Rule 1104 of the Commission’s Rules,5 that the Proposed Plan is approved, and the approved Plan of Distribution shall be posted simultaneously with this order on the Commission’s website at www.sec.gov. For the Commission, by the Division of Enforcement, pursuant to delegated authority.6 Vanessa A. Countryman Secretary 2 Exchange Act Rel. No. 94877 (May 9, 2022). 17 C.F.R. § 201.1103. 4 All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Proposed Plan. 5 17 C.F.R. § 201.1104. 6 17 C.F.R. § 200.30-4(a)(21)(iv). 3 2 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3Af103f0215c182975. Public record. Not legal advice.