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Ruling: Financial counselor sold securities not approved by state

Posted: August 10, 2012 2:00 a.m.
Updated: August 10, 2012 2:00 a.m.
 

By Signal Staff

 

A Newhall financial counselor who hosts a local radio show devoted to money matters offered and sold securities in a Costa Rican resort that were not “qualified,” which means they were not approved by the state, a judge for California’s Office of Administrative Hearings has ruled.

On Thursday, the state’s Department of Corporations approved a decision made last month by Administrative Law Judge Jankhana Desai ordering Arif Halaby and his company Total Financial Solutions Inc. to desist and refrain from violating a section of California’s Corporations Code with regards to the resort securities.

California Corporations Commissioner Jan Lynn Owen upheld the judge’s decision, making it effective as of Thursday.

Halaby could not be reached for comment Thursday despite phone and email messages left for him.

According to Desai, the former College of the Canyons Foundation board member failed to submit paperwork on the resort securities as required under California’s Corporations Code.

Halaby is the president, CEO and control person of Total Financial Solutions, a California corporation with an office in Newhall.

He also hosts a radio show on KHTS called the “Total Financial Solutions Safer Money Hour.”

Halaby came under state scrutiny last fall over promissory notes issued by Majestic Sunset Playa in Costa Rica.

Between November and February, Halaby’s case was discussed and argued in Los Angeles before Desai at the Office of Administrative Hearings.

It was alleged that Halaby and Total Financial Solutions Inc. offered and sold securities in the form of common stock and promissory notes issued by Majestic Sunset Playa Azul, S.A., without those securities being qualified, in violation of section 25110.3.

Before any security is sold in California, it has to first be “qualified” with the Department of Corporations unless an exemption exists.

The department has not issued a permit or other form of qualification authorizing any person to offer and sell Majestic securities in the state, Judge Desai noted in his decision.

Halaby did not present any argument or evidence claiming that Majestic is exempt from qualification, he added.

Mark Leyes, spokesman for the Department of Corporations, explained the judge’s decision Thursday.

“He failed to meet the legal requirements which are there to protect consumers,” Leyes told The Signal.

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