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Letter to the editor

Timbervest CEO disputes SEC

The story, “SEC ruling expected in Timbervest case” (Aug. 18, 2014) did not contain much of our side of the story in part because the reporter mostly relied upon the SEC's biased information. Among the points missed is the administrative law judge's prior ruling that disbarment of the principals will not be an outcome of these proceedings.

The alleged infractions in this proceeding are old and isolated. Of the hundreds of transactions Timbervest has conducted with enormous sums of money at stake, the Securities and Exchange Commission's Division of Enforcement has pointed to only three, all of which took place nearly eight years ago. Two involve a payment of commission fees while the third is an alleged prearranged deal.

These supposed infractions represent less than 1% of the money in the 350-plus transactions completed during the last decade, which covered approximately 1.4 million acres of timberland costing more than $1.5 billion (including more than $140 million in timber harvests that have taken place). On average, sales completed approximated 112% of market value, all to the benefit of our clients.

Regarding the division's assertion we terminated a hunting lease on a client's property so that we could construct a hunting lodge for our own use, what really happened was we enhanced the property's value by millions of dollars with the addition of a lake, road system and other amenities a hunter as buyer would expect.

The so-called hunting lodge (see photo) in reality is a utility barn. To allege this was a “destination” for anyone is obviously absurd. We might note that the lease we canceled (for all of $7,000 per annum) was also part of preparing the property for sale; it's simply not good practice to have armed hunters, contractors and prospective buyers on a property at the same time.

These stories would be humorous if they were not evidence of SEC attorneys' intent on achieving a predetermined, punitive result, rather than the truth. The division has ignored the statute of limitations and has more than reasonable doubt of its own assertions, yet it proceeds in its attack.

Witnesses on record early with clear memories and accounts of simple activities have flipped their scripts after meeting with investigators. Incredibly, a staff attorney inadvertently released a document to us, which clearly demonstrated our innocence. Even more incredible, the judge later allowed that document to be “protected” as privileged.

We have become prisoners of a process that lacks protections granted under the Constitution. Still, after years of unfettered access to Timbervest, there is not one document or other reliable piece of hard evidence to support any wrongdoing.

Now that the judge has ruled,we are prepared to appeal the decision. Unfortunately, at this stage, the initial appeal is to the same body of people — the SEC — which we believe has no regard for due process or the presumption of innocence. In federal court, we will finally be afforded independent judges and normal constitutional protections.

In summary, the reality does not at all reflect the tale spun by the SEC. Although the allegations against us are few and frivolous, we have spent an extraordinary amount of money to date to clear our names.

And, despite what was printed, our business is solid and growing.

Joel Shapiro

CEO

Timbervest LLC

Atlanta

Editor's note: SEC Administrative Law Judge Cameron Elliot on Aug. 20 ruled that Timbervest LLC and four of its principals violated securities laws in relation to the case discussed in this letter. Timbervest's lawyer said the firm intends to appeal. For more information about the ruling, see: SEC rules Timbervest violated Investment Advisers Act