We’ll go to Springfield to find out how "The Simpsons" have made it on TV for three decades
Phoenix Businessman Faces $11 Million In Fines
A Phoenix man is under fire by the Arizona Corporation Commission for allegedly breaking the state’s securities laws and is facing more than $11 million in civil fines.
Brian Hageman defended himself in a set of hearings this week in downtown Phoenix that will determine whether he broke the law when he sold shares of his companies Deluge Inc. and Hydrotherm Power Corp. without being registered in Arizona.
In her opening statement at the first hearing on Monday, Corporation Commission attorney Wendy Coy accused Hageman of taking $11 million from 700 investors over a 15-year period.
“Mr. Hageman failed to inform investors and offerees that he had been selling stock since 1998, and the entities had little to no revenue and no returns or dividends had ever been paid to investors,” Coy said. “Further, after 2010, Mr. Hageman failed to disclose to offerees that Deluge and Hydrotherm were no longer active corporations due to the failure to pay back taxes, yet he continued to offer and sell stock in non-existent entities.”
One of Hageman’s earliest investors was late baseball Hall of Famer Harmon Killebrew. His widow, Nita Killebrew, took the witness stand, where she was cross-examined by Hageman himself because he didn’t have an attorney.
“You had him come to shareholder meetings," Killebrew said. "You had him come to Deluge when other possible investors were coming in. You had him come in to validate yourself."
“I recall him at some investor meetings, but I never remember telling him that you have to do that for a contract,” Hageman said.
“That was part of the arrangement you made in the beginning,” Killebrew said.
“Do you have any documents that show…” Hageman said.
“No, interestingly enough I don’t remember ever getting a contract,” Killebrew said.
The hearings concluded on Tuesday, and closing arguments are due Sept. 5. An administrative law judge will then decide whether to grant the Corporation Commission’s request for a cease-and-desist order against Hageman and more than $11 million in restitution plus other civil fines for violating Arizona securities law.
The Corporation Commission could also choose to refer the case to the Arizona Attorney General’s Office for a criminal investigation.