The former president and chief executive of Bank of Choice in Greeley, Colo., will pay $65,000 to investors to settle charges he violated registration and anti-fraud provisions of the Colorado Securities Act.

Darrell McAllister allegedly launched an unregistered preferred stock offering in the summer of 2008, according to a March complaint by Colorado Securities Commissioner Fred Joseph. McAllister was also accused of directing bank staff to persuade customers to trade their CDs for preferred stock without ensuring that customers were fully informed of the risks involved in the exchange. Four investors lost more than $500,000 from the transactions, according to the complaint.

Bank of Choice failed in July 2011; it was sold to Bank Midwest in Kansas City, Mo.

McAllister also agreed not to violate securities laws as part of the settlement, according to Colorado Securities Commissioner Fred Joseph.

The settlement was filed Thursday in Denver District Court, though it still needs judicial approval

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