UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SEC Admin Release 34-86446, IA Release 40-5306 / July 24, 2019: The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that public administrative and cease-and-desist proceedings be, and hereby are, instituted pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 ("Exchange Act") and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 ("Advisers Act") against Foundations Asset Management, LLC ("FAM"), and that cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 21C of the Exchange Act and Section 203(k) of the Advisers Act against Michael W. Shamburger ("Shamburger") and Rob E. Wedel ("Wedel") (FAM, Shamburger, and Wedel are referred to collectively herein as "Respondents"). The Commission finds that these proceedings concern conflicts of interest that were not properly disclosed and brokerdealer registration violations by registered investment adviser FAM and its two principals, Shamburger and Wedel. From May 2013 through June 2016 ("the relevant period"), FAM improperly received approximately $254,000 in compensation from private real estate fund Alaska Financial Company III LLC ("AFC III") and AFC III's manager McKinley Mortgage Co. LLC ("McKinley"), while acting as an unregistered broker. FAM, through Shamburger and Wedel, solicited clients and recommended that they invest approximately $12 million in AFC III promissory notes. This compensation, which was not properly disclosed to FAM clients, included approximately $126,000 in up-front compensation calculated as a percentage of an initial investment and approximately $128,000 in trailing fees based on FAM client investments that remained with AFC III each quarter. FAM, through Shamburger, also made false and misleading statements in five Form ADV Part 2A filings ("ADV Brochures") filed with the Commission between March 2014 and March 2015, regarding the compensation it received for selling AFC III securities and advising FAM clients. As a result of Respondents' conduct, FAM violated Sections 206(2) and 207 of the Advisers Act and Section 15(a) of the Exchange Act; Shamburger and Wedel caused FAM's violations of Section 206(2) of the Advisers Act and Section 15(a) of the Exchange Act; and Shamburger caused FAM's violations of Section 207 of the Advisers Act.

Order

Cease and Desist

Civil and Administrative Penalty(ies)/Fine(s)

$25,000.00

FAM AGREED TO POST NOTICE OF THE ORDER ON ITS WEBSITE FOR A PERIOD OF 12 MONTHS, PROVIDE NOTICE TO AFC III INVESTORS OF THE ORDER, AND PROVIDE A COPY OF THE ORDER TO CLIENTS FOR NEXT 24 MONTHS. FAM SHALL MAKE ALL PAYMENTS REQUIRED UNDER THE ORDER WITHIN 360 DAYS OF THE ORDER. SHAMBURGER AND WEDEL SHALL MAKE PAYMENTS REQUIRED UNDER THE ORDER WITHIN 14 DAYS OF THE ORDER.