News

States crack down on unlicensed ATM investments

June 22, 2003

ST. LOUIS -- A cease and desist order was issued Friday against four businesses and two individuals involved in offering unregistered ATM and payphone investment contracts to at least one Missouri resident, according to a report in the St. Louis Business Journal.

Named in the order, issued by Missouri Secretary of State Matt Blunt, are: Michael Best, owner and sales agent of M.E. Best Investment Services of Sarasota, Fla.; Edward B. Denison, president of JED Technologies of Clearwater, Fla.; EDB Consulting Inc., Clearwater, Fla.; and High Tech Financial Products of Columbus, Ohio.

From July 1999 until September 2001, Michael Best sold at least one Missouri resident $200,000 in investments in ATM and payphone contracts, Blunt said in a statement.

Customer-owned payphones and ATMs with management servicing contracts meet the definition of a security under Missouri law, according to the Business Journal.

Similar action was taken against JED Technologies and High Tech Financial Products by the Pennsylvania Securities Commission, which issued a cease and desist order against the companies in February. According to a statement by the Commission, Joseph Watters, a JED sales agent sold an ATM investment program to at least 25 Pennsylvania residents between September 1999 and November 2001.

ATMs were sold for $10,000, with management services provided by EBD, an affiliate company of JED Technologies. According to the Commission's statement, a "cash flow analysis" provided to investors contained unsubstantiated projected rates of return on investment ranging from 16.8 percent for five ATMs to 76.2 percent for 20 ATMs.