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Altavista’s Muehler has Long History of Unregistered

Securities Scams (Part 2 of 3)
By Brett Goetschius and Teri Buhl | March 8, 2017

Steven Muehler is no stranger to securities regulators, despite never having a securities license. The SEC has tracked his involvement in
the sale of unregistered securities back to at least 2008.

In April 2009 the Minnesota Department of Commerce ordered Muehler and a Muehler-controlled company, SJM Investments, to cease
and desist from engaging in fraudulent conduct in offering securities and from acting as an unregistered broker-dealer in Minnesota.
Minnesota officials charged that Muehler offered to solicit investors for customers who were attempting to start new businesses; offered
unregistered securities to investors; acted as an unregistered broker-dealer; and “engaged in fraudulent and deceptive practices by failing
to return advance fees that were obtained from customers under the premise that the fees were refundable.”

A second cease-and-desist order (http://www.dbo.ca.gov/ENF/pdf/2010/LAInvestment_DR.pdf) from the California

Department of Business Oversight dating to August 2010 targeted Muehler and his company LA Investment
Capital for illegal sales of securities in six unregistered limited partnerships purportedly investing in energy,
media and real estate companies.

In 2012, Muehler was the subject of a report by The Deal that, as the chief executive of Delray Securities,
he solicited several-thousand dollar fees from CEOs of small energy and mining companies in return for
facilitating their listing on the Frankfurt Stock Exchange, an exchange notorious for its minimal listing
standards and willingness to list the shares of companies without the consent of the issuers themselves.
Steven J. Muehler
Reg A+ Offers New Opportunities

In October 2014, on the eve of the implementation of new rules expanding and liberalizing the Reg A offering process, Muehler launched
the Alternative Securities Markets Group (ASMG), with the purported aim of offering emerging growth companies an integrated capital
formation, share listing and securities trading platform to conduct Reg A offerings.

In March 2015 Muehler filed with the SEC to raise $20 million via a Tier 1 Reg A offering of “fixed income notes” through ASMG. The filing
listed Muehler, ASMG CEO Wes Johnson, and ASMG’s COO Rich Moniak as equal 30% owners in the company. Two other officers,
Koorosh “Danny” Rahimi and David Dobkin, each owned 5% stakes. Muehler assigned to himself the roles of Founder, Chief Financial
Officer, and Senior Compliance Officer.

An updated filing by ASMG in August 2015 listed 24 wholly owned subsidiaries, including 18 “yet to be formed” investment funds, the
Alternative Securities Market Exchange, Inc., a “Stock Exchange” for trading Reg A securities, Alternative Securities Markets Group Ltd., a
“Bermuda Stock Exchange broker” for international clients, and Alternative Securities Market, LLC, a “broker dealer”.

ASMG’s 60-page offering circular failed to mention that none of the ASMG subsidiaries, nor any of its executives, were licensed to
underwrite, sell or trade securities, or render investment advisory services, at the time. Indeed, the filing was often explicit in its declarations
that ASMG’s subsidiaries were either properly registered or such registrations were pending and expected in due course. In one discussion
of possible acquisitions by the company, ASMG claimed “it will be better positioned to pursue acquisitions as the only Registered
Investment Advisory, Broker Dealer with an SEC Registered Stock Exchange….”

In another section on the broker-dealer unit, the company stated Alternative Securities Market, LLC, was “registered as a Broker-Dealer
current in the State of California. The Firm plans to be registered as a Broker-Dealer in all 50 States, and the District of Columbia, Puerto
Rico and the U.S. Virgin Islands in the next twelve months.” It added that the unit was a “Member of Financial Industry Regulatory Authority,
Inc. (FINRA).”

California’s Department of Business Oversight, which regulates brokers and investment advisors within the state, does not license
brokerage firms independent of national licensing through FINRA. FINRA has no record of Alternative Securities Market or Muehler ever
being licensed as securities brokers or investment advisors.

SEC Halts Third Muehler Scheme

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On September 28, 2015, just three months after the Reg A+ reforms became effective, marking the dawn of a new mini-IPO market that
promised to revolutionize emerging growth company finance, Muehler and ASMG were issued a cease-and-desist order
(https://www.sec.gov/litigation/admin/2015/34-75996.pdf) and accused by the SEC of operating as a broker-dealer without a license. The regulator said
Muehler had taken $50,000 in fees from about 30 small businesses in his scheme. Muehler settled with the agency midway through his
case hearing in February 2016.

On June 21, 2016 the SEC announced Muehler had been banned from the penny stock market indefinitely. Muehler admitted to violating
federal securities laws and was ordered to pay about $400,000 in disgorgement, fines, and restitution. The Reg A+ market had experienced
its first securities fraud – not against investors in the market as so many had warned about, but against would-be issuers seeking capital.

ASMG’s two websites were taken down, and Muehler was removed from ASMG’s executive team. Johnson and Moniak remained with the
company, and moved the Alternative Securities Exchange to www.theASMX.com (http://www.theASMX.com) where the two executives, neither
of which have any experience operating alternative trading systems, are pursuing a portal model for Reg A issuers. The site currently lists
just two active deals. The company’s Reg A offering was never approved by the SEC.

Ban? What Ban?

Muehler appears to have been undeterred by the SEC action against him. On September 30, 2015, two days after the SEC first filed suit
against him in the ASMG case, Muehler incorporated AltaVista Capital Markets LLC and several related companies, corporate records in
California show. Several of the companies, including AltaVista Capital Markets, LLC; AltaVista Private Client, LLC; and AltaVista Securities,
LLC, list Muehler’s wife Claudia Leite-Muehler (using her maiden name Claudia Martin Leite) as the agent for the businesses, and the
Muehlers’ two-bedroom condo in Marina Del Rey, Calif., as the companies’ office address. It is the same address listed in ASMG’s
corporate filings.

Additionally, at least three websites promoting corporate and real estate

investment via Reg A securities: altavista-cap.com,
altavistamortgagecapital.com, and nanocapmarket.com; are registered
(http://wa-com.com/nanocapmarket.com) to AltaVista Capital Markets LLC and
Claudia Martin Leite, using the same 4050 Glencoe Ave., Marina Del
Rey, Calif. address. The admin contact person listed in the registrations,
steve@asmgbank.com, is an email used by Muehler.

One of the sites, altavista-cap.com, promoted AltaVista’s purported

brokerage, investment and alternative securities exchange services, and
is listed as the corporate website in AltaVista’s Reg A filings. Originally
registered on December 19, 2015, and updated December 27, 2016 by
Claudia Muehler, the website was abruptly taken down in the last week
and its registration records moved to a third-party administrator to cloak The headquarters of AltaVista Capital Markets in Marina Del Rey.
the domain’s ownership, after Growth Capitalist approached Muehler
and AltaVista executives for comment on this story.

Issuers Share Similar Stories

Founders and senior executives of emerging growth companies interviewed for this story recount similar stories of Muehler and AltaVista
Capital’s president Koorosh “Danny” Rahimi – who was formerly President of Asset Management and a director at Muehler’s ASMG –
approaching them through contacts made at angel investor meetings and offering a complete alternative public offering (APO) package,
including an initial Reg A offering, public share listing, and capital from a group of venture funds managed by AltaVista Capital. All that
would be needed was around $10,000 for legal and filing fees, which Muehler and Rahimi said was refundable if no money was raised,
according to the executives.

AltaVista’s website stated Koorosh “Danny” Rahimi had been a registered investment advisor for over 20 years. A search in FINRA’s broker
database shows he is not currently a registered investment advisor and was only registered for seven years over the past three decades.
Rahimi said in an interview with Growth Capitalist that he “didn’t pay attention” to what Muehler wrote in his bio on the website.

Two CEOs of startups who have signed deals with AltaVista said in interviews that they worked with Danny Rahimi to get their Tier 1 Reg A
offerings ready to file with the SEC. According to the CEOs they were told the firm had investors in Nanocap Market venture funds ready to
invest in their Reg A offerings once qualified. Once the funds made their initial investments in the issuers’ Reg A offerings, the shares would
trade on AltaVista’s own alternative trading system or ATS, which it called Nanocap Market/Microcap Market.

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 A page from NanocapMarket.com describing one of AltaVista's 17 venture funds.

As of March 7, AltaVista’s Nanocap Market website (https://www.nanocapmarket.com/investment-funds) listed 17 separate venture funds,
differentiated by sector focus ranging from agriculture to media, energy to biotech, aviation, financial services and mining. The description
for each of the funds begins with “AltaVista Private Client, LLC is a FINRA Registered Investment Advisory Firm (CRD: 284397), and is the
Operator of the Nanocap Market & the Microcap Market.”

A check in FINRA’s broker database shows no record of AltaVista Private Client or AltaVista Capital as a registered investment advisor or
broker dealer. The CRD number listed is not a valid number according to the SEC’s IAPD investment advisor database. FINRA does not
license investment advisory firms.

A search of Form D filings for the funds reveal that all were created by Rahimi on October 18, 2016 and have yet to raise any capital.
Neither AltaVista nor Nanocap Market/Microcap Market appear on the SEC’s current list of approved ATS operators.

The CEOs reacted with disbelief and shock when they were shown that Nanocap Market was not on the official list of ATS operators, or that
Rahimi wasn’t currently registered as an investment advisor. After he was shown Rahimi’s broker records, Dennis Fletcher, CEO of
NorthWest Trout Farms, said, “Are you telling me my whole team of lawyers didn't due their due diligence?”

Thursday – Part Three: AltaVista’s Clients Speak Out

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