2013-07-30 sec-litreleases litigation_release 64 KB 2,531 chars

SEC v. John M. Sensenig, No. LR-22764, Eastern District of Pennsylvania (July 30, 2013) — Press Release

raw: John M. Sensenig

John M. Sensenig, No. LR-22764 (July 30, 2013)

Caption: SEC v. John M. Sensenig

summary

John M. Sensenig, founder of Conestoga Log Cabin Leasing, Inc., was charged with raising over $10 million from 1,500 Amish and Mennonite investors through unregistered sales of securities and making material misrepresentations, resulting in a $131,500 civil penalty and permanent injunction.

paragraph

John M. Sensenig, founder of Conestoga Log Cabin Leasing, Inc., was accused of raising over $10 million from more than 1,500 Amish and Mennonite community members through unregistered sales of securities. Sensenig allegedly made material misrepresentations and omissions to investors, including concealing the use of proceeds and failing to disclose risks and prior state regulatory sanctions. He agreed to pay a $131,500 civil penalty and was permanently enjoined from further securities law violations.

narrative

The U.S. Securities and Exchange Commission (SEC) charged John M. Sensenig, founder of Conestoga Log Cabin Leasing, Inc., with fraud and unregistered securities offerings for raising over $10 million from more than 1,500 Amish and Mennonite investors between 1997 and 2009 through unregistered promissory notes. Sensenig allegedly misled investors by concealing how funds were used—primarily to finance his own start-ups—and failing to disclose risks and prior state regulatory sanctions. Although over half the funds were returned to investors, the SEC alleged violations of Sections 5(a), 5(c), 17(a)(2), and 17(a)(3) of the Securities Act of 1933 due to the unregistered nature of the offerings and material omissions. Without admitting or denying the allegations, Sensenig consented to a final judgment permanently enjoining him from future securities law violations and participation in unregistered offerings. He was ordered to pay a $131,500 civil penalty and required to surrender all shares in two affiliated companies. The SEC waived a higher penalty due to Sensenig's financial condition. The settlement was subject to court approval.

Enriched metadata

Scheme: affinity-fraud (90%)
Court: Eastern District of Pennsylvania
Outcome: settled
Civil penalty: $131,500
Entity: John M. Sensenig

Classified affinity-fraud(confidence 90%). EDGAR detection: forms Form D· recall 58% / precision 2%. detection rule →

Extracted insights

Dollar amounts 1

$132K $131,500 $100K–$1M

Entities 2

agency Securities and Exchange Commission
organization Securities and Exchange Commission

Triples 2

Securities and Exchange Commission filed charges against John M. Sensenig, founder and owner of Conestoga Log Cabin Leasing, Inc.
John M. Sensenig committed fraud and unregistered sales of securities violations

View original SEC litigation releasesec.gov

Extracted body text (2,531c)

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 22764 / July 30, 2013 Securities and Exchange Commission v. John M. Sensenig, Civil Action No. 13-cv-4378 (E.D. Pa.) SEC Files Settled Charges Against John M. Sensenig, Founder and Owner of Conestoga Log Cabin Leasing, Inc. for Fraud and Unregistered Sales of Securities Violations On July 29, 2013, the Securities and Exchange Commission ("Commission") filed a complaint against John M. Sensenig ("Sensenig"), in the United States District Court for the Eastern District of Pennsylvania alleging that Sensenig, a member of the Mennonite community and the founder and owner of Conestoga Log Cabin Leasing, Inc. and other affiliated companies, violated the antifraud and securities registration provisions of the federal securities laws. The Commission's complaint alleges that from at least 1997 until 2009, Sensenig raised millions of dollars from more than 1,500 fellow members of the Amish and Mennonite communities through the offer and sale of Promissory Notes. Sensenig used the proceeds to finance a collection of start-up companies he founded and controlled, the largest of which was Conestoga Log Cabin Leasing, Inc. More than half of the funds raised by Sensenig were returned to investors. The complaint further alleges that Sensenig made material misrepresentations and omissions to investors including failing to disclose the use of proceeds, the risks associated with the investment, and remedial sanctions placed on him by a state securities regulator. The Commission further alleges that Sensenig failed to register the offering of the Promissory Notes although no exemption from registration applies. The complaint alleges that this conduct violated Sections 5(a), 5(c), 17(a)(2) and 17(a)(3) of the Securities Act of 1933 ("Securities Act"). Without admitting or denying the allegations in the complaint, Sensenig consented to the entry of a final judgment, subject to the court's approval, in which he is: (i) permanently enjoined from further violations of Sections 5 and 17(a) of the Securities Act, (ii) permanently enjoined from direct or indirect participation in any unregistered offerings of securities; (iii) ordered to pay a civil penalty in the amount of $131,500; and (iv) ordered to surrender for cancellation all shares of stock he owns in two privately held companies formerly affiliated with Conestoga Log Cabin Leasing, Inc. The Commission is not seeking the imposition of a higher penalty in light of Sensenig's financial condition.

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