SEC accuses Florida payday lender of fraudulent misrepresentation in offer

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On September 27, the SEC deposit charges against a Florida-based payday lender and its CEO (collectively, the “Defendants”) for fraudulently raising over $ 66 million through the sale of promissory notes to hundreds of retail investors, including members of the Venezuelan-American community in South Florida. The SEC accuses the defendants of falsely promising investors that their money would be used only to make small, short-term loans and for the associated costs. However, the defendants reportedly embezzled around $ 2.9 million for personal gain, transferred around $ 3.6 million to family members and friends with no apparent legitimate business purpose, and used at least $ 19.2 million. dollars of investor funds to make Ponzi-like payments to other investors. The complaint further contends that the defendants are misleading investors by promising high annual returns and claiming the business was profitable, and have made false claims about the safety and security of the promissory notes. The SEC complaint alleges violations of registration and anti-fraud provisions of federal securities laws and accuses the CEO of acting as an unregistered broker. The lawsuit seeks a permanent injunction against the defendants, restitution with pre-judgment interest, civil penalties and a ban on executive and director against the CEO.


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