<< All News Thursday, September 2, 2004

Bismarck, ND - On August 13, 2004, the North Dakota Securities Department issued an Order to Summarily Suspend the agent registration and investment advisor representative registration of Ross Owen Haugen, a Grand Forks based securities agent.

The Order also proposed the revocation of Haugen's agent and investment adviser representative registrations in North Dakota. Haugen is an agent of Capital Growth Financial, Inc., a broker and investment adviser headquartered in Boca Raton, Florida.

Mr. Haugen's activities placed his clients at significant risk while he profited through high commissions, often between 6 and 10 percent of the investment. said Karen Tyler, North Dakota Securities Commissioner. Additionally, the Securities Department finds that Haugen engaged in dishonest and unethical practices in his dealings with clients.

As described in the Order, Haugen has been the subject of more than 12 customer complaints. In those complaints, Haugen's former clients alleged that Haugen engaged in unsuitable trading, that he breached his fiduciary duty, and that he engaged in unauthorized trading and other fraudulent conduct, as well as other claims regarding the sales of private placement securities. To date, more than $400,000 has been returned to investors through settlements and arbitration awards, and several of the complaints are still pending.

The Order also identifies that Haugen has been the subject of five regulatory actions wherein the Securities Department assessed more than $30,000 in civil penalties against Haugen and Capital Growth Financial, Inc.

Haugen has been the subject of a registration agreement with the North Dakota Securities Department, and heightened supervision by his employer. Despite those restrictions, Haugen sold high-risk private placement securities in violation of state and federal law, and on several instances sold private placement securities to elderly investors who could not afford to risk their limited assets.

Mr. Haugen continued to violate securities laws despite numerous regulatory actions, a registration agreement, and heightened supervision by his employer. Tyler continued, Mr. Haugen's actions dictated the removal of his registration.

Under the Order, Haugen had the opportunity to request a hearing before the Securities Department. Haugen did not request a hearing, and instead, withdrew his registration in North Dakota. In a related matter, the Securities Department requested that Capital Growth Financial, Inc., Haugen's employer, withdraw its dealer registration in North Dakota, and it did so on August 26, 2004.

It is very rare that the registration of a North Dakota securities agent is suspended, said Tyler. Mr. Haugen's activities show a persistent pattern of violating securities laws and placing his own interests before those of his clients.

As a result of the Order and registration withdrawal, Mr. Haugen and Capital Growth Financial, Inc. cannot legally conduct securities business within or from the state of North Dakota.

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