Home Merchant cash advance SEC accuses Long Island firm of fraud in $500 million securities offering

SEC accuses Long Island firm of fraud in $500 million securities offering

0

A Massapequa, NY, financial advisory firm and two of its executives have been charged with securities fraud by the Securities and Exchange Commission for their involvement in an unregistered fraudulent offering of $500 million in securities, it recently announced. the SEC.

The commission charged Massapequa-based AG Morgan Financial Advisors; company owner Vincent J. Camarda of Amityville, NY; and the company’s chief compliance officer, James McArthur of Mount Sinai, NY, for illegally offering and selling securities through a fraudulent offer related to Par Funding, a Palm Beach Gardens-based lending company, in Florida.

The commission also said that AG Morgan and Camarda had solicited investments in Par Funding, also known as Complete Business Solutions Group, without disclosing to clients that they had borrowed money from the loan company and not had never fully repaid it, the SEC said.

Par Funding and its executives were the subject of a 2020 commission complaint that said they were operating a fraudulent scheme raising hundreds of millions of dollars from investors nationwide. A court-appointed receiver has been appointed to oversee the crowdfunding in 2020.

According to the latest SEC complaint, Camarda, McArthur and AG Morgan Financial Advisors raised more than $75 million from more than 200 investors from at least August 2017 through July 2020 for Par Funding’s non-registered securities offering. . Camarda and McArthur collectively received more than $7 million in compensation from Par Funding for their sales of unregistered securities. While soliciting investors, AG Morgan and Camarda breached their fiduciary duty to their clients by failing to disclose that they had a conflict of interest, the SEC said.

The commission’s complaint said that in December 2016, Camarda, on behalf of AG Morgan, borrowed $750,000 from Par Funding through so-called “merchant cash advance” transactions. Next, Camarda and McArthur began soliciting investors to invest in promissory notes issued by Par Funding under its non-registered securities offering. The pair convinced nearly a dozen investors to invest at least $2.6 million in crowdfunding promissory notes.

The executives told investors that their investments were safe, while failing to disclose that AG Morgan was indebted to Par Funding and that Camarda was guarantor of that debt. In 2017, the two men continued to solicit investment through face-to-face meetings and over the phone to invest in crowdfunding, asking investors to purchase securities in the form of crowdfunding promissory notes, which, according to they usually offered 12% interest with the return. of the principal after 12 months.

The SEC wants AG Morgan, Camarda and McArthur to return any ill-gotten gains.