June 12, 2020
On June 2, 2020, the Securities and Exchange Commission (SEC) released an Order Instituting Administrative Proceedings against investment adviser representative Todd Esh, a resident of Lenexa, Kansas.
In the Order, and through an offer of settlement presented by Esh, the SEC found that between March 2018 and July 2019, Esh made material misrepresentations and omissions to investors in connection with a securities offering.
The SEC order was released shortly after the SEC filed a civil complaint in the U.S. District Court’s Western Division in Missouri that alleges Esh helped orchestrate a $3.6 million fraudulent securities offering that operated through BirdDog Business, LLC and BirdDog Oil Equipment, LLC., two entities founded and controlled by Esh and his business partner Phillip Hundall. Esh and Hundall stated to investors that their funds would be used to buy refurbished used oil and gas equipment which BirdDog would resell at a profit, guaranteeing a 30 percent return after nine months. To further lure investors, Esh and Hundall allegedly touted the profitability and quick returns in prior purported transactions, stating that the concept of equipment transactions was tried and true. However, the SEC asserts that the funds were misappropriated or squandered on failed equipment deals.
According to the SEC, Todd Esh violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. The SEC imposed sanctions, including barring Esh from associating with any broker dealer, investment adviser, or other related association with the securities industry. The SEC also barred Esh from participating in any offering of a penny stock.
Over the past ten years, Esh has been associated with three brokerage firms: Waddell & Reed in Overland Park, Kansas from January 2008 to October 2015; Park Avenue Securities LLC in New York, New York from October 2015 to November 2017; and LPL Financial LLC in Shawnee, Kansas from March 2018 to July 2019.