USA: Washington State fines Yakima Brewing former president $7,500
The state of Washington has fined the former president of Yakima Brewing & Malting Co. US$7,500 for violating the state securities laws, following an investigation into the company's stock sale, the Associated Press posted on November 16.
According to a consent order filed last month with the state Department of Financial Institutions Securities Division, J. Greg Tranum of Olympia agreed to pay a $5,000 fine plus $2,500 in investigation costs. Tranum had waived his right to a hearing and agreed to cooperate with the state in any further investigations into the company's stock offering.
Tranum resigned as president on July 15. He now serves as the company's sales and marketing director. A hearing for the company's vice president, Paul C. Brown Jr., is still pending.
The state accused company officials of failing to disclose key financial information to investors when they offered $1-a-share preferred stock in the company from June 2003 to May 2004.
The state's complaint said the stock offering contained omissions and misleading information, the stock was not registered for sale in the state and Tranum and Brown were not registered to sell securities in Washington.
The stock offering came as the brewery said it needed to raise capital to continue marketing and increase production of a new beer, Grant's Mandarin Hefeweizen. The state said Yakima Brewing at that point was facing substantial cash flow problems and falling behind on payments to suppliers, problems not disclosed to investors. About 500 investors from 12 states bought the preferred stock, raising about $500,000.
The allegations were the latest in a string of problems for Yakima Brewing, which was founded in Yakima by the late Bert Grant in 1982.
Last year, the company's Grant's Brewery Pub was evicted from its longtime North Front Street home after amassing more than $85,000 in debt owed to the Burlington Northern Santa Fe Railroad. The brewery pub moved to a new location.
The company saw a second complaint filed in Yakima County Superior Court in August, accusing the company of owing $34,650 in back rent and penalties for the 20,000-square-foot brewery built in 1990 to expand production capacity.
Last month, Yakima Brewing closed its production plant in Yakima to cut costs. The company said it would move its production to the Southeast, West Coast and Northeast.
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