A default order has been issued by the Arizona Corporation Commission against a Florida man, Richard K. Hainsworth III, and his two limited liability companies for committing securities fraud. He and his companies have been ordered to pay $69,425 in restitution and a $20,000 administrative penalty.
The Commission found 21 investors learned about Hainsworth III’s and TreyTrades, LLC of Arizona’s and TreyTrades, LLC of Florida’s alleged trading business primarily through the respondents’ social media posts and referrals from mutual acquaintances.
The Commission found investors bought into the investment program with the expectation that their funds would be used for trading currencies, stock and crypto currencies. However, the Corporation Commission found the respondents made material misrepresentations and omissions to investors when selling these investments while not registered with the Commission’s Securities Division as a securities salesman or dealer.
The Commission found that Hainsworth and his companies represented to investors that they had a large clientele with dozens of investors who each invested between $5,000 and $200,000. The Commission found the respondents represented that they had generated $1.3 million of profit in several months when, in fact, no investor invested more than $17,000, there was no evidence of any profits, and no clients were ever paid a return.
Additionally, Hainsworth and his companies failed to inform later investors that several previous investors had received no return.