On February 3, 2016,
the Securities and Exchange Commission announced charges of fraud against a lending company out of Manhattan and its owner.
Fraud charges were also levied against the brokerage firm acting as the
placement agent, as well as two executives.
American Growth Funding II LLC and Ralph Johnson are accused of repeatedly
lying to investors purchasing high-yield securities, promising a 12% annual
return to investors in AGF II. They allegedly falsely claimed that the
financial statements were being checked with an annual audit and misrepresented
documents regarding details of loan values and management. According to
the complaint, AGF II raised roughly $8.6 million from investors during
the time period from March 2011 to December 2013.
Portfolio Advisors Alliance, a brokerage firm and the placement agent for
AGF II—are also accused of fraud. The SEC alleged the firm knew
of the inaccurate documents, but still continued to use them in order
to solicit sales.
Andrew A. Calamari, Director of the SEC’s New York Regional Office
“We allege that AGF II misled investors and overstated the true value
of these investments, which are worth far less than presented because
many of the company’s loans are non-performing. We further allege
that Allen and Wasserman looked the other way and allowed PAA to facilitate
the fraud as the placement agent.”
If you lost money with American Growth Funding II LLC, learn about your
legal rights to seek compensation. Call our securities fraud attorneys
at Meyer Wilson for a free consultation today.