MORRISON ORDERS MONTANA FIRM TO STOP VIOLATING STATE SECURITIES LAWS
Bigfork decorative tile company ordered to cease illegal activity; More than $1 million allegedly defrauded from investors
Montana State Auditor John Morrison issued a Cease and Desist Order last week against Style N’ Tile, LLC, and Flathead County residents Fredrick (Fritz) Keck, Sydnee Keck, Louise Tidwell and James Coolidge, ordering them to stop violating the Montana Securities Act. Morrison’s order follows a Notice of Proposed Agency Disciplinary Action issued the previous week against these same respondents which alleges they committed securities fraud when they made material omissions and misrepresentations to at least 22 investors of Style N’ Tile, LLC.
“Violating securities laws is a serious matter and registration requirements have an important consumer protection purpose,” said Morrison. “Montanans must use caution when deciding where to invest their hard-earned dollars. I encourage any resident who has been offered a questionable investment to contact my office. We rely on these reports to find and take action against individuals who should not be offering financial products in or from Montana.”
The Auditor’s Office alleges that beginning in 1998 Fritz Keck started soliciting investors for a new business venture, Style N’ Tile. Style N’ Tile promoted itself as a decorative tile company manufacturing kiln-fired murals and single tiles featuring exclusively-licensed original art work by well-known artists such as Cézanne, Van Gogh and Norman Rockwell. Since 1998, Style N’ Tile has received at least $1,156,750 from investors. Most of the investors received promissory notes that were not registered with the Montana State Auditor’s Office. As the promissory notes came due, instead of paying the terms of the note, Style N’ Tile rolled the investor’s funds into new promissory notes or convinced the investor to convert their note into an LLC membership interest.
In addition the Auditor’s Office alleges that through numerous letters and emails, the Keck’s, Tidwell, and Coolidge made false promises that misled investors about the investment’s potential. For example, the Auditor’s action alleges Fritz Keck told one investor that he would get his investment back within 10 to 20 months, if not sooner. Additionally, the action alleges Fritz Keck told numerous investors that in the event of his death, investors would receive their investment money back because each investor was named on his personal life insurance policy. The Auditor’s action alleges no such life insurance policy exists.
The Auditor’s office is seeking restitution, including 10% interest annually, for each of the investors, as well as a fine of $5,000 for each alleged violation of the Montana Securities Act.
Morrison urges Montanans who may have been solicited by or may have invested in Style N’ Tile to immediately notify the State Auditor’s Office by calling toll-free at 1-800-332-6148 or in Helena at 444-2040.