Doolittle

BACKGROUND

A. The Mobile Home Venture Defendant was the proprietor of Monterey Bay Securities, a registered securities broker/dealer, and Monterey Bay Investment Corporation, a registered investment advisor. He or his corporations held licenses, permits, or certificates to engage in various additional activities including real estate and insurance brokerage and tax preparation. He testified that while he initially conducted a “general securities business,” the “emphasis” later “changed more into real estate,” specifically “[r]eal estate financing” and associated ventures. Around 1990 his primary business became “trust deeds investments,” in which “you [would] have borrowers that would want to borrow funds secured by real property but, for whatever reason, couldn’t get a bank loan and would go to a private source.” He “would arrange groups of investors together to buy those loans or to fund those transactions for different types of individuals and institutional borrowers.” Defendant testified that the venture at issue here had its germ in discussions with Larry Kroeker, a “friend who was a mobile home contractor.” Kroeker suggested “that

2 we consider going into business to…