1st Global Capital LLC & its Former CEO Allegedly Ran a $287 Million Investment Scam That Defrauded 3,400 Retail Investors
1st Global Capital LLC and its former chief executive officer Carl Ruderman allegedly operated a $287 million securities fraud, according to an SEC Complaint under review by investor rights attorneys Alan Rosca and Paul Scarlato of the Goldman Scarlato & Penny law firm.
Said scam defrauded at least 3,400 retail investors, more than one-third of whom invested their retirement funds, the SEC alleged. A significant portion of the money was misused and converted, and is likely lost.
Eric I. Bustillo, Director of the SEC’s Miami Regional Office, has shed further light on the case:
We allege that 1 Global’s business model was a sham because instead of using investor funds as promised, 1 Global and Ruderman diverted significant funds, including to Ruderman himself for his personal benefit. The SEC’s investigation effectively stopped 1 Global’s offering and prevented further harm to investors and retirement funds.
Due to the severity of the alleged fraud, the SEC requested to appoint a receiver over certain of the defendants including relief defendants:
• Bright Smile Financing, LLC
• BRR Block, Inc.
• Digi South, LLC
• Ganador Enterprises, LLC
• Media Pay LLC
• Pay Now Direct LLC
In addition to other Ruderman companies charged by the SEC as relief defendants, the SEC’s had their request for a temporary asset freeze granted against Ruderman.
The Court has also scheduled a hearing for September 7, 2018, for Ruderman and the aforementioned relief defendants to show cause, if any, why the asset freeze Order should not continue for the pendency of the litigation or until otherwise ordered by the Court, the SEC states.
Investor rights attorney Alan Rosca and his partners are investigating the sales of notes to investors by 1st Global Capital LLC and its former chief executive officer. The attorneys’ investigation includes the activities of those investment professionals that recommended and sold 1st Global Capital promissory notes to their customers without conducting adequate due diligence as to that entity, and without disclosing to their investors the substantial risks surrounding those notes.
Investors who believe they may have lost money in activity related to 1 Global Capital LLC and Carl Ruderman’s alleged investment fraud scam are encouraged to contact attorney Alan Rosca with any useful information or for a free, no obligation discussion about their options.
1st Global & Ruderman Charged with Violations of the Antifraud, Securities Registration & Broker-Dealer Registration Provisions
1st Global and Ruderman have been charged by the SEC with violations of the antifraud, securities registration, and broker-dealer registration provisions of the federal securities laws, according to SEC Reports under review by attorney Alan Rosca.
The SEC is also seeking disgorgement of allegedly ill-gotten gains and prejudgment interest from the defendants and relief defendants, and financial penalties against the defendants. However, given the fraud that allegedly took place and the misuse of funds, it is unclear how much money is left in the scheme, to be distributed to investors. Attorney Alan Rosca and his partners’ goal is to try and supplement whatever recovery may be available through the SEC’s case, by going after individuals and entities that helped perpetrate the scheme or enabled it, and may be held liable to investors for their role in the scheme.
1st Global allegedly marketed itself to business borrowers as a simple way to access cash quickly, often made big, unsecured loans, and had significant problems with collections, the SEC states. 1st Global declared bankruptcy in July and Ruderman resigned from the company, the SEC reports.
Securities Lawyer Preparing to Take Action and Seek Compensation for Investors
The Goldman Scarlato & Penny PC law firm represents investors who lose money as a result of investment-related fraud or misconduct and are currently investigating 1 Global Capital LLC and its former chief executive officer’s alleged investment fraud scam. The firm takes most cases of this type on a contingency fee basis and advance the case costs, and only gets paid for their fees and costs out of money recovered for clients. Attorney Alan Rosca, a securities lawyer and adjunct professor of securities regulation, and has represented thousands of victimized investors across the country and around the world in cases ranging from arbitrations to class actions.
Investors who believe they lost money as a result of 1st Global Capital LLC and Carl Ruderman’s alleged investment fraud scam may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at email@example.com, or through the contact form on this webpage.