Bismarck, ND - Fargo area insurance agent, David A. Skjerven, is ordered by the North Dakota Securities Commissioner to Cease and Desist from selling promissory notes or other securities in North Dakota.
The Securities Department is conducting an investigation based on the complaints of several North Dakotans, most of whom live in the Fargo area, related to the sale of promissory notes issued by Skjerven and/or companies affiliated with Skjerven.
Skjerven issued promissory notes valued at more than $2 million to residents of North Dakota, said Karen Tyler, North Dakota Securities Commissioner. Many of the notes are outstanding, and many investors have not been repaid as required by the terms of the investment.
According to the Order, Skjerven and his business, Skjerven Financial Services, engaged in a scheme or artifice to defraud investors.
Based on the investigation of the Securities Department, it appears that Skjerven issued new notes and used money brought in from new investors to pay earlier investors. This is one of the hallmarks of a Ponzi scheme, said Tyler.
Additionally, the notes were not registered as required by North Dakota law, and neither Skjerven nor his Skjerven Financial Services were registered to sell securities in North Dakota.
In February of 2005, Skjerven entered into a Consent Order with the Securities Department based on the sale of a promissory note by Skjerven to a Fargo area resident. Skjerven was assessed a civil penalty of $10,000 for this activity.
Mr. Skjerven violated the existing Consent Order, which precluded him from selling unregistered securities, or from selling any securities while he was not registered, said Tyler.
The investigation of the Securities Department is ongoing, and there may well be victims that have not reported their investment to the Securities Department. Any information from the public would be appreciated, Tyler added. Please contact Matthew Bahrenburg, Attorney, North Dakota Securities Department at (800) 297-5124 or 328-2910 (Bismarck local).