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Letter to the editor

Loder subject of SEC inquiry

At issue is a $5-million investment by 50 bay area millionaires.

By SCOTT BARANCIK, Times Staff Writer
Published December 7, 2007

When 50 Tampa Bay area millionaires invested a total of $5-million last year in a high-interest promissory note, they didn't know that a chunk of it would be used to buy a stake in NakedPoker.com. The fledgling Web site hired porn stars and a Playboy centerfold to help promote it but later failed.

They didn't know that the note's issuer and guarantor, St. Petersburg developer John Loder, already had guaranteed $56-million in commercial mortgages. They never guessed that Steve Spencer - Loder's business partner and a co-owner of the family-owned investment firm that marketed the note, Spencer International Advisors of Clearwater - would obtain partial check-writing privileges on the $5-million account. No one told them that Loder, 41, was a seventh-grade dropout.

Probably none of this would have mattered if Loder had made a scheduled interest payment in July. He did not, however, and now the U.S. Securities and Exchange Commission is investigating. According to an SEC document obtained by the St. Petersburg Times, which broke the story in September, the federal agency is quietly contacting the various parties involved "to determine whether there have been any violations of the federal securities laws."

The SEC may get an earful:

- Loder, who said the idea to invest in NakedPoker.com was ex-partner Steve Spencer's, said Spencer reneged on a promise to take responsibility for half the $5-million guarantee. Loder also accused Spencer International president Scott Spencer, Steve Spencer's 44-year-old brother, of demanding and receiving a $50,000 cash kickback for raising the $5-million investment. "That's an outrageous allegation," Spencer International attorney Paul Raymond said.

- An attorney representing the millionaire investors recently demanded $5-million from a law firm that helped draft the "Loder Note" legal brochure. In a letter last month, Wanda Hagan Golson accused the Ruden McClosky law firm in Tampa of misleading her clients by, among other things, failing to disclose the extent of Loder's other debts and the depth of his business relationship with Steve Spencer. Ruden attorney Steve Holtzman said that the allegations were "entirely without merit" and that Spencer International's clients relied on the investment firm for advice.

- Raymond, Spencer International's attorney, said he agreed with Golson that the brochure was flawed. He also said Loder appeared to be making good on a threat to defame Spencer International if it did not provide him with some emergency funding. Steve Spencer did not return phone calls seeking comment.

The origins of the $5-million dispute are tied to the recent housing boom and bust.

Though new to real estate development, Loder and Steve Spencer quickly developed a niche. They purchased apartment buildings located on prime waterfront property in Pinellas County, obtained huge loans to convert them into condominiums and attempted to sell them for a huge profit. One such project was the 124-unit Redington Shores Yacht & Tennis Club along Boca Ciega Bay.

Always in need of cash for the next project, the two turned for help to Spencer's father, Spencer International founder James Spencer. The solution was the Loder Note, a four-year loan that would pay a hefty annual interest rate of 15 percent. Spencer International recruited 50 "accredited" clients - investors with a net worth of at least $1-million - and told them the funds represented an advance on the proceeds of Loder's Redington Shores stake. If Loder Note LLC were to default, Loder's Redington Shores stake would serve as collateral, the note's fine print said, and Loder and his wife would guarantee repayment.

But when the real estate market slowed and Loder couldn't muster his July interest payment, the investors declared default. It turned out that Loder's Redington Shores stake had already been claimed by a second, previously unknown lienholder.

Golson said she is exploring avenues for repayment. In addition to her demand from Ruden McClosky, she is considering an offer from Spencer International. The investment firm proposes to pay the investors $1.5-million of the $5-million note for a release from further liability.

Scott Barancik can be reached at barancik@sptimes.com or (727) 893-8751.

[Last modified December 6, 2007, 22:57:02]