Two Portland residents have become defendants in a U.S. Securities and Exchange Commission lawsuit that first named former Spokane stockbroker Lloyd Pankey.
Marvin Pursinger and Machlene Soderquist were the guarantors of promissory notes Pankey sold in 1992 and 1993, according to an amended complaint filed last month in U.S. District Court.
They also were officers of Brendan Marshall Inc., an Oregon company that was supposed to market tapes produced by amateur musicians.
No tapes ever were sold, and the company folded in 1993 after Pankey and his company, Continental Investment Services Inc., had raised $580,000 from investors who were told the notes would return 15 percent in one year.
No money ever was repaid, and the lawsuit complains Pursinger and Soderquist converted much of the money to their own use.
Pankey, the suit says, knew of the conversions and also was allowed to use some of the money to repay some of his own obligations.
Neither Pankey nor Continental were registered broker-dealers at the time the notes were sold. Nor were they registered investment advisers, as required by federal statute.
The original complaint was filed in September.