Feb 22 2012
Contact: Ryan Hobart, (573) 526-0949

Carnahan Halts Tech Investment Sales by Unregistered California Agents

According to the cease and desist order issued by officials in Carnahan’s Securities Division, Enrico Blandin solicited investments in eCity from a 65-year-old Missourian, telling the investor that eCity’s stock was about to double, the investor would receive dividends and eCity was going to be the greatest thing since Google.  

The order alleges that after investing all of her retirement funds ($25,000) in eCity, the investor spoke with eCity representative Lori Arzamendi who reassured the investor that the investment would be a good opportunity and that she would retain 100% of the investment. The order states that neither Blandin nor Arzamendi have ever been registered as securities agents in Missouri.    

The order also states that eCity filed a form with the Missouri Securities Division in 2008 stating that it would sell its securities to accredited investors in Missouri. Securities Division investigators concluded that the St. Louis investor did not qualify as an accredited investor.  

“We see far too many cases where people from another state, who aren’t registered in Missouri, try to sell an investment to someone who doesn’t fit the qualifications,” Carnahan said. “These instances underscore how important it is for Missourians to call the Investor Protection Hotline before turning over their savings, no matter how enticing an offer sounds.”

An accredited investor is one to which companies may sell private investments due to the investor’s wealth or sophistication. To be an accredited investor under Missouri law, an individual must make $200,000 a year (for the last two years) or have $1 million in net worth (not including the value of the individual’s primary residence). According to the order, Arzamendi instructed the investor how to complete the purchaser questionnaire and identify herself as an accredited investor but neglected to inquire about the investor’s actual accredited investor status.

The cease and desist order alleges that Blandin and Arzamendi sold unregistered securities and committed securities fraud by failing to disclose material information. Blandin also failed to disclose that Benedict H. Van, CEO of eCity, had generally solicited investors and failed to disclose material information to investors in California through a different company.  

The respondents in this matter face up to $130,000 in penalties and costs and the possibility of paying restitution to the harmed investor. Respondents have 30 days to request a hearing and contest this matter. The Securities Division is cooperating in this matter with other law enforcement agencies.

For more information regarding investments and fraud protection, or for information regarding a company or representative, visit the Secretary of State’s online Investor Protection Center at or call the toll-free Investor Protection Hotline at 1-800-721-7996.

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