Shopoff Realty Investments Allegedly Engaged in the Fraudulent Sale of $12.57 Million of Promissory Note Investments to 29 Investors

Shopoff Securities, Inc. through two of its officers, President and Chief Executive Officer William A. Shopoff and his brother, Senior Vice President for Investor Relations Stephen R. Shopoff, from about December 2010 through March 2017, allegedly made fraudulent sales of approximately $12.57 million of promissory note investments to 29 investors, according to a Complaint from FINRA’s Department of Enforcement under review by under review by investor rights attorney Alan Rosca.

Said notes were issued by two Firm affiliates that were owned by William Shopoff, purportedly to fund his private real estate firm, the Complaint states.

Shopoff Securities, Inc., an Orange County-based developer, also allegedly failed to disclose that $165,000 investment proceeds would actually be transferred to William Shopoff and his personal trust to pay his and his wife’s personal expenses, FINRA notes.

FINRA also makes allegations that Shopoff also purportedly failed to disclose that some investment proceeds would be used to repay previous note investors, the Complaint reports.

Said notes were issued by two Firm affiliates that were owned by William Shopoff, purportedly to fund his private real estate firm, the documents state.

Furthermore, even though William Shopoff and his aforementioned wife personally guaranteed their cleints’ investments, the Respondents allegedly failed to disclose to investors that the Shopoffs’ assets were mostly illiquid, FINRA notes.  

Investor rights attorney Alan Rosca, of the Goldman Scarlato & Penny PC law firm, is investigating activity related to Shopoff Realty Investments’ alleged sale of fraudulent promissory notes. Investors who believe they may have lost money in activity related to Shopoff Realty Investments’ alleged sale of fraudulent promissory notes are encouraged to contact attorney Alan Rosca with any useful information or for a free, no obligation discussion about their options.

Shopoff Allegedly Failed to Pay Investors $31 Million & Allegedly Fraudulently Transferred Assets to Shell Entities

William A. Shopoff is also reportedly facing accusations that he failed to pay investors $31 million and that he allegedly fraudulently transferred assets to shell entities to avoid covering the debts, Court documents show.

Shopoff Securities, William Shopoff and Stephen Shopoff therefore, based on the alleged aforementioned accusations, allegedly willfully violated Securities Exchange Act and FINRA Rules, the Complaint states.

Said Respondents also allegedly made recommendations that investors purchase unsuitable Notes, and by making these recommendations without a reasonable basis to do so, Shopoff Securities, William Shopoff and Stephen Shopoff allegedly violated NASD Rule and FINRA Rules for conduct occurring on or before July 8, 2012, and allegedly violated FINRA Rules for conduct occurring on or after July 9, 2012, the Complaint states.

In addition, from at least August 2014 through August 2016, Shopoff Securities and William Shopoff allegedly fraudulently sold two private placement offerings which were allegedly sponsored by William Shopoff‘s private real estate firm, FINRA notes.

Shopoff Securities, via William Shopoff, also allegedly massively inflated he and his wife’s cash assets in a financial statement given to a third-party due diligence provider assessing the Shopoffs’ financial wherewithal, the Complaint states.  

Shopoff Securities and William Shopoff allegedly thereby allegedly willfully violated Securities Exchange Act and FINRA Rules, FINRA states.

Shopoff Securities is a captive registered broker-dealer with its principal place of business in Irvine, California, and William Shopoff founded the Firm in September 2006 and it became registered with FINRA in May 2007, the Complaint states.

Shopoff Securities is majority-owned by the Shopoff Revocable Trust, which is a personal trust wholly owned by Respondent William Shopoff and his wife, whose first name has not been disclosed, the Complaint reports.  

At all times relevant to this Complaint, Shopoff Securities primarily sold retail and wholesale offerings of its affiliates, which are also majority-owned by the Shopoff RevocableTrust, the Complaint notes.

Finally, it is important to note that, as of the date of this article, there has not been a finding of liability as to the complaints mentioned in this article, unless otherwise indicated.

Securities Lawyer Investigating

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 Shopoff Realty Investments’ alleged sale of fraudulent promissory notes. 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 Shopoff Realty Investments’ alleged sale of fraudulent promissory notes may contact attorney Alan Rosca for a free no-obligation evaluation of their recovery options, at 888-998-0530, via email at rosca@lawgsp.com, or through the contact form on this webpage.