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Commission Sanctions Arizona Insurance Producer and His Company for Multimillion Dollar Investment Scheme Involving Elderly Investors, Revokes Adviser Licenses

The Corporation Commission ordered respondents Ronald Stevenson, the estate of Barbara Stevenson, and American Financial Security, LLC to pay, jointly and severally, $19,459,875 in restitution and $275,000 in administrative penalties for defrauding investors in a debenture scheme. The Commission also revoked the investment adviser representative license of Ronald Stevenson and investment adviser license of American Financial Security, LLC (AFS) for unethical and dishonest conduct.

The Corporation Commission found Mr. Stevenson has been a licensed Arizona insurance producer since 2002. The Commission found Mr. Stevenson met with investors in his Prescott, AZ office and proposed that they invest in debentures issued by EquiAlt, LLC, claiming they were safe and suitable investments. Investors were told their investment money in EquiAlt Debentures would be used to flip, lease, or purchase distressed or foreclosed real estate or land and the investors would receive a 6 to 9 percent return on their principal.

The Corporation Commission found that some investors were in their 70s and 80s at the time of their investment. One investor was 97 years old when Mr. Stevenson sold her a three-year EquiAlt Debenture. 

The Corporation Commission found the respondents failed to disclose to investors that they were getting paid commissions, derived from a percentage of the principal investment amount; furthermore, subscription agreements given to investors by the respondents stated they did not receive commissions. Also, the Commission found Mr. and Mrs. Stevenson and AFS failed to disclose to investors two civil lawsuits naming Ronald Stevenson and AFS as defendants.

The Corporation Commission found that, despite Respondent Mr. Stevenson's characterization that the EquiAlt Debentures were appropriate for low-risk investors, the investment was highly speculative and not suitable for some investors who did not want to invest in high-risk investments. Further, the Commission found that Mr. Stevenson and AFS misrepresented the liquidity of the EquiAlt Debentures to investors.

In February of 2020, the U.S. Securities and Exchange Commission (SEC) filed a complaint against EquiAlt, LLC and its principals. In its complaint, the SEC alleged that EquiAlt had been conducted as Ponzi scheme since 2011 and raised over $170 million from the sales of EquiAlt Debentures to over 1,100 investors nationwide.

All documents relating to this agenda item can be found in the Corporation Commission's online docket at https://edocket.azcc.gov and entering docket number S-1110A-20-0190.


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