Judge Confirms American Cash Flow Corporation’s Training Programs OK Under Tennessee Law

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In a final legal victory for American Cash Flow Corporation and its parent company, Dynetech® Corporation, on November 8, 2004, J. Randall LaFevor, the Administrative Judge appointed by the Tennessee Secretary of State, ordered the Tennessee Securities Division to reimburse Dynetech $133,438.60 for expenses, including attorneys’ fees, incurred in defending a Cease and Desist Order filed against them by the Securities Division on June 20, 2003. The Order became final on November 23, 2004 when the Division failed to file for appeal or reconsideration.

In a final legal victory for American Cash Flow Corporation and its parent company, Dynetech® Corporation, on November 8, 2004, J. Randall LaFevor, the Administrative Judge appointed by the Tennessee Secretary of State, ordered the Tennessee Securities Division to reimburse Dynetech $133,438.60 for expenses, including attorneys’ fees, incurred in defending a Cease and Desist Order filed against them by the Securities Division on June 20, 2003. The Order became final on November 23, 2004 when the Division failed to file for appeal or reconsideration.

The first legal victory in this case came on December 17, 2003, when the Division’s Petition was dismissed by the Judge. The dismissal followed the Judge’s determination that the Division had failed to show it was entitled to the relief sought. In doing so, the Judge ruled that the training programs offered by ACFC are not securities. The dismissal came after a two-day evidentiary hearing in which the Division presented its case. The Judge dismissed the Division’s Petition without even asking ACFC’s attorneys to present a defense.

The Division subsequently appealed the December 17, 2003 dismissal order to the Commissioner of the Tennessee Department of Commerce and Insurance.

The second legal victory in this case came on May 18, 2004, when a Final Order was entered by the Commissioner upholding the order of dismissal previously entered by the Judge and remanding the case to the Judge for consideration of Dynetech’s and American Cash Flow Corporation’s Motion for Reimbursement of Expenses Including Reasonable Attorneys’ Fees.

In its November 8, 2004 Order, requiring the State to reimburse Dynetech for its attorneys’ fees and expenses, the Judge concluded that the filing of the Cease & Desist by the State was “unwarranted” and “a flagrantly inappropriate use of the government’s power.”

The Judge summarily ruled that the Division’s action was not “well-grounded in fact;” that the Division’s citation “was not warranted by existing law, rule or regulation;” and, that the State must “absorb the considerable expenses resulting from this flagrantly inappropriate use of the government’s power.”

In his scathing assessment of the State of Tennessee’s case, Judge LaFevor wrote that the Cease & Desist Order “was based on false characterizations of the available facts and mistaken assumptions about the nature of the cash flow industry in general, and about the specific business enterprise engaged in by the Respondents in particular.” “Those mistakes,” he wrote, “could easily have been corrected during a properly-conducted investigation and analysis….”

The judge’s stinging rebuke to Tennessee Securities Division staff said, “it is easy to see how the Commissioner was misled” by Securities Division staff, “(and legal counsel, who apparently did little or no factual investigation and legal analysis of his own) into issuing the unwarranted Cease & Desist Order in this case.”

The statement made by Laurence J. Pino, founder and CEO of Dynetech®, following the initial dismissal of the Division’s case, holds true today: “. . . we were very confident that ACFC would be vindicated on the merits. But we do regret the manner in which this case was handled. If the Department of Commerce and Insurance had picked up the phone and inquired about what ACFC does, we could have explained how we meet both the letter and spirit of Tennessee law. We could have avoided the imprudent issuance of a cease-and-desist order that put us out of business and cost us thousands of dollars. We could have avoided the expenditure of thousands of dollars in legal fees. We could have avoided the spectacle of their officials walking into our place of business trailed by TV news crews. And the Department could have avoided the embarrassment of being told by the Judge that it had no case.”

About the American Cash Flow Corporation and Dynetech Corporation

American Cash Flow Corporation is the largest and most successful cash flow organization in the world, providing extensive education, training and support to successful cash-flow professionals throughout the country. It hosts the annual Cash Flow Convention, where thousands of professionals from throughout the country gather each year, and publishes the monthly American Cash Flow Journal®, with a readership of over 25,000, which keeps readers abreast of the industry’s latest news and trends.

Dynetech Corporation (http://www.dynetech.com) is an Orlando-based enterprise development and management company and American Cash Flow Corporation’s parent company. Dynetech delivers rapid product and technology development, as well as sales, marketing, training, logistics and operational services for its own proprietary brands and, on an out-source basis, to third-party companies seeking direct-to-market solutions.

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Marc Narine