Carnahan Seeks Return of Over $6 Million to Investors from Missouri Pet Food Company
Thursday, May 19, 2011
Jefferson City, MO – Missouri Secretary of State Robin Carnahan today announced a Cease and Desist Order against Frank Renick and his companies in Montgomery City, Mo., for allegedly selling more than $6 million in unregistered stocks and bonds, and for allegedly misleading at least 700 investors in more than four states about those products.
According to the Cease and Desist Order issued by officials in Carnahan’s Securities Division, Renick organized a series of corporations, including Spectrum Pet Care, Inc., Spectrum Pet Foods, Inc., and SPC Brands, Inc., to manufacture and sell natural and organic pet food and treats, as well as pet care and animal health care products. However, some of the investments were not registered and Renick allegedly failed to disclose to investors that Spectrum had little revenue. Renick also allegedly used his investors’ funds to pay off previous investors and to pay personal expenses.
“My office will continue to go after everyone who misleads Missourians into investing with them,” Carnahan said. “Anyone offering an investment first must register with my office and fully disclose what they are selling. Before you turn over any of your savings, call my Investor Protection Hotline to make sure the offer is legitimate.”
According to the order, Renick told investors that Spectrum Pet Foods would “go public” and its stock value would double at that time, and that the stock could be sold back to the company at any time. The order alleges that Renick is currently attempting to raise funds in the State of California under the business name Consolidated Food Group, Inc., in order to pay back those individuals who invested in Spectrum.
Renick convinced a 62-year-old St. Louis resident to both personally invest $20,000 in stock and purchase $25,000 in Spectrum bonds through the St. Louis resident’s corporation, according to the order. The order also states that at different times from 2007-2010, Renick told the investor that Spectrum was going to merge with an international pet food and candy manufacturer, that he had meetings set up with a billion-dollar agriculture and home improvement retailer, and a worldwide convenience store chain contacted Renick about putting Spectrum products in 3,300 stores. Securities Division investigators contacted the agriculture retailer, which said Renick scheduled a meeting but didn’t show up, and the convenience store chain, which said that the company hadn’t placed Spectrum products in its stores and never agreed to do so.
The order also states that a 74-year-old Kansas City, Mo., resident invested $20,000 with Renick in a Spectrum bond after seeing an advertisement about the opportunity in a newspaper. Renick allegedly told the investor that Spectrum was doing “wonderfully” and would sell products at major, national stores. He is charged with failing to tell the investor of the risks of the investment or the financial condition of the company and with failing to honor the terms of the bond.
Renick and his companies face up to $40,000 in penalties and costs, and the possibility of being ordered to pay in excess of $6 million in restitution to harmed investors. Respondents have 30 days to request a hearing and contest this matter. The Securities Division is cooperating closely in this matter with other law enforcement and government agencies.