March 13, 2009                                                         Contact:Lucas Hamilton

Montana State Auditor Seeks Independent Financial Examiner in Securities Bankruptcy Case


      80 Montana investors and $32 million in Investments Involved
      
      Montana State Auditor and Commissioner of Securities Monica Lindeen today announced a federal bankruptcy judge has granted a motion to appoint an independent financial examiner to look into a securities case involving 80 Montana investors and $32 million in investments.
      
      An attorney for the State Auditor's Office, Mike Winsor, and former U.S. Congressman Rick Hill, an investor impacted by the matter, traveled to Wilmington, Delaware today to testify as to the need for an independent examiner and a forensic accounting in the bankruptcy case of DBSI, a Boise-based national investment firm. DBSI investors throughout the country pooled their money to pay for Rick Hill's travel expenses in $10 and $15 increments.
      
      "Many of the investors are seniors who relied on these investments to live independently in their retirement," said Lindeen. "They have a right to know what happened to their money."
      
      DBSI, is facing regulatory and civil lawsuits alleging the firm engaged in securities fraud, banking fraud, tax fraud and racketeering. A class action suit filed by a group of DBSI investors further allege DBSI and its principals were engaged in a "ponzi" scheme in which proceeds of sales from new properties were used to make guaranteed payments on existing properties.
      
      "The tenant-in-common investors have been fighting to get an examiner to uncover the improper conduct by DBSI and its principals," said Hill. "I was pleased to testify on behalf of the motion to appoint an examiner and thank Montana Securities Commissioner Monica Lindeen for being among the states that are supporting the work of the State of Idaho to investigate DBSI, Doug Swenson and other principals who are alleged to have committed fraud in their dealing with investors."
      
      Lindeen's office asked Honorable Peter J. Walsh, a federal bankruptcy judge for the United States Bankruptcy Court for the District of Delaware, to appoint an independent financial examiner to investigate Idaho based real estate and securities firm DBSI's collapse and to conduct a forensic accounting of the company's books. In November 2008, DBSI filed Chapter 11 bankruptcy in Delaware bankruptcy court.
      
      The Auditor's office previously filed a joinder motion with the Delaware bankruptcy court on February 27, 2009 seeking to join the State of Idaho's motion for the appointment of an examiner.
      
      The investments offered and sold by DBSI to investors were offered under a federal securities exemption, an exempt that preempts states from any regulatory review. Lindeen says states need to be allowed to be proactive and review a company's financial condition before it is allowed to offer its investments to investors.
      
      "At this critical time, it is imperative that securities regulation be improved to better protect investors, markets and the economy as a whole," said Lindeen. "Congress needs to restore states' authority to protect its investors."
      
      Note: The court is expected to rule from the bench by 3:00pm MDT. We will send an update at that time.
      
      Background:
      
      DBSI, based in Boise, Idaho and founded in 1980, was a leader in so-called tenant-in-common, or TIC, real-estate/securities transactions. Tenant-in-common properties allow an investor to hold title to a fractional interest in a property.
      DBSI, either directly or through affiliated broker-dealer firms, sold tenant-in-common investments to at least 80 Montana investors in an amount exceeding $32,000,000. These investors are located in 36 communities throughout Montana.
      
      LOCATIONS and AMOUNT Invested
      
      Anaconda Area
      $200,000
      
      Kalispell Area
      $400,000
      
      Anthem Area
      $500,000
      
      Lavina Area
      $132,156
      
      Bozeman/Belgrade Area
      $2,826,749
      
      Lewiston Area
      $130,000
      
      Big Fork Area
      $486,273
      
      Lincoln Area
      $200,000
      
      Big Timber Area
      $553,000
      
      Livingston Area
      $1,108,194
      
      Billings Area
      $4,297,832
      
      McAllister Area
      $75,000
      
      Butte Area
      $200,000
      
      Missoula Area
      $3,231,249
      
      Chester Area
      $75,000
      
      Polson Area
      $564,929
      
      Cut Bank Area
      $765,635
      
      Stevensville Area
      $800,000
      
      Denton Area
      $335,248
      
      Three Forks Area
      $250,000
      
      Dillon Area
      $2,126,797
      
      Twin Bridges Area
      $2,820,000
      
      Helena Area
      $6,402,892
      
      W. Yellowstone Area
      $250,000
      
      Gardiner Area
      $1,575,000
      
      Whitehall Area
      $380,000
      
      Glendive Area
      $525,000
      
      Wilsall Area
      $1,050,000
      
      Harlowton Area
      $100,000
      
      TOTAL
      $ 32,360,954
      
      
      Contact the State Auditor's Office toll free at 1-800-332-6148 or online at www.sao.mt.gov.