Commissioner Lindeen's Office Negotiates Agreement On Receiver of Investor Assets in Cornerstone Case
Seeks To Inventory Recoverable Assets for Investors
Helena - Montana Commissioner of Securities and Insurance Monica Lindeen today announced she has successfully negotiated the appointment of a receiver and a preliminary injunction in the district court case against a Polson-based company in an alleged Ponzi-scheme.
"My office will continue to do everything we can to help Montana investors recover their hard-earned savings," said Lindeen.
Lindeen's request to appoint a receiver had been set for a hearing July 21 in Helena. However, the respondents withdrew their objections making a hearing unnecessary. The district court is expected to issue an order appointing the receiver within the next 10 days. The investigation involves the sale of unregistered high-yield promissory notes to over 100 investors and nearly $15 million in investments.
The receiver will go through the records of Cornerstone Financial Corporation, Robert Congdon and Keith Kovickand create a work plan to inventory the assets and determine what assets can be recovered for investors. Lindeen's office has asked that Judge Loren Tucker be appointed to serve as receiver.
As part of the agreement, Cornerstone, Kovick, and Congdon have also agreed to allow the Commissioner's office to begin the process of recovering and analyzing the business records and computers of Cornerstone Financial and affiliated companies.
The agency's administrative action against Cornerstone, Congdon and Kovick, which includes the allegations of securities fraud and illegally operating a Ponzi scheme, is scheduled for hearing in January. The Securities Department is seeking to permanently bar Congdon and Kovick from working in the securities industry in Montana as well as seeking administrative fines. Violations of the Montana Securities Act carry fines of $5,000 per violation which could total $10 million depending on the outcome of the case.
Lindeen said additional investors in the matter continue to surface. Montanans who feel they have been treated unfairly by an investment broker or company or who believe they have been the victims of fraud should call the Montana State Auditor's office at 1-800-332-6148 or in Helena at 444-2040.