USVEI head signs consent agreement

The head of the organization that planned to install a complex of veterans-related services in Altoona has signed a consent agreement with the state Department of Banking and Securities, in which the department accuses him of “activity in violation of the Pennsylvania Securities Act.”

Dennis Butts, CEO of U.S. Veterans Educational Institute, agreed to the consent order without admitting to the allegations, which include failure to disclose to the buyers of $240,000 of USVEI stock that he had a prior order from the state of Virginia not to sell securities there.

The consent order permanently bars Butts from a variety of stock-sale-related activities in Pennsylvania, including “representing an issuer offering or selling securities in this state,” “acting as a promoter, officer, director or partner of an issuer” and “being registered as a broker-dealer, agent, investment advisor or investment advisor representative.”

Butts declined comment.

When Butts sold USVEI stock, he should have disclosed the Virginia State Corporation Commission order, which barred him from “all aspects of the securities business” in that state – because that “constitutes a fact which a reasonable investor would consider to be material in connection with the purchase of a security,” according to the Pennsylvania consent agreement.

Such facts are “required to be disclosed in the offering materials of USVEI,” according to the consent agreement.

Butts also violated the Pennsylvania Securities Act by not registering the USVEI stock and by providing different potential buyers different “offering materials,” with different terms and conditions, including a variety of price ranges and an early-purchase incentive for some, according to the consent agreement.

And he violated the act by failing to preserve records “showing every disbursement of payment or money borrowed from the stock offering,” according to the consent agreement.

By signing the Pennsylvania order, Butts waives his right to appeal, according to the consent agreement.

Mirror Staff Writer William Kibler is at 949-7038.