Lending Company and Brokerage Firm Charged with Fraud
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 said this:
“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.