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FINRA Department of Enforcement v. Wade H. Bradley

Disciplinary Proceeding No. 2011025780101, October 19, 2012, Los Angeles, California

The FINRA Department of Enforcement filed a complaint against Wade H. Bradley related to the financing of the film, “Knights of Badassdom.”  Bradley, who was the President and Chief Compliance Officer of IndieVest Securities, sold membership units in Knights of Badassdom Production, LLC (KOB), and its successor, Knights of Badassdom Production 1, LLC (KOB1), which produced the film.  These offerings were made pursuant to Rule 506 and Regulation D.  The funds that were collected were supposed to be kept in escrow until a minimum of $4.5 million was raised, or if the minimum was not reached by a certain date, the funds would be returned to investors.  On July 2, 2010 Bradley signed a letter that purported to confirm that IndieVest had agreed to lend KOB1 $1.6 million.  However, there was no evidence of such a loan having been made.  The complaint alleged that Bradley knew that IndieVest never deposited the funds into the escrow account, the escrow account had less than $4.5 million when the escrow broke, and Bradley continued to sell the securities after escrow broke.  FINRA’s Department of Enforcement filed this complaint, alleging violations of Exchange Act section 10(b), Rule10b-9, and FINRA Rules 3010 and 2010.