Posted: Dec 20, 2012 9:11 AM by KBZK Media Center
HELENA - A Bozeman man has been fined $40,000 for illegally selling investment opportunities.
Scott Wacker, owner of the penny-auction website FunkyShark.com, was issued the fine by Commissioner of Securities and Insurance Monica J. Lindeen, according to a news release. He also agreed to pay back more than $834,000 to investors to resolve a restraining order Lindeen's office filed against him, stopping him from soliciting new investors or spending any of the investment money he had already raised.
Last September, Wacker began recruiting investors and by the end of October, he had raised over $1 million from investors across the world, according to the release.
Investigators determined that Funky Shark was a pyramid scheme.
In the two months it operated, Funky Shark paid nearly $378,000 in commissions to participants who recruited new members. Those commission payments left Funky Shark unable to repay all of its participants in full, so Wacker agreed to pay $270,000 out-of-pocket to make investors whole.
"Mr. Wacker stepped up to the plate and repaid his investors," said Lindeen. "Often when we handle these types of cases, there's simply no money left to repay participants. But for a number of reasons, this case is unique. Mr. Wacker didn't understand what he was getting into, and he has expressed his commitment to setting things right."