GTS Research, Inc.

Agency:
Description: On August 7, 2007 the California DOC filed a Desist and Refrain Order against this company and its principal, Carl Larue Godfrey. The order was filed in the public interest when the Commissioner determined that sufficient evidence existed to conclude that the company was engaged in the offer or sale of securities in GTS Research, Inc. without first qualifying the offer with the State. The represented purpose of this offering was to sell interests in GTS Research, Inc. in order to raise capital to produce, manufacture, sell, and license a product known as an “Electromagnetic Motor Employing Multiple Rotors”. These securities were offered or sold in issuer transactions to California residents.

According to the Order, the company and it's agents used various false statements to persuade California investors to invest more than $150, 000 in the project. The company represented to investors among other things, that they could get a profitable return on their investments within at least a year, misrepresented the existence of prototypes, and that the company had secured millions of dollars in sales contracts for GTS products. Carl Larue Godfrey personally made false statements concerning taking the project “public;” the viability of patents, and made false representations with regard to his personal achievements, special training, educational credentials and accomplishments in an effort to entice persons to invest. Mr. Godfrey also failed to disclose his past criminal record regarding illegal business practices and various other crimes to investors, which could have deterred an investor from entering into business dealings with him, or his company.

The Order prohibits the company, and Carl LaRue Godfrey, from further offer or sale of any security in the State of California, including but not limited to investment contracts, by means of any written or oral communication which include untrue statement of material facts, or omits to state a material fact necessary to make an informed decision, and requires the company to desist and refrain from the further offer or sale of securities in the State of California, including but not limited to investment contracts, unless and until qualification has been made under the law or unless exempt.

Date of Action: 8/7/2007