The SEC claims that the videos falsely guaranteed promising returns, and that the defendants raised more than $14 million from over 100 investors for their real estate funds.
Having dealt with the SEC for decades, I know the penchant for overstatement and unique views of facts, but in this case there are allegedly videos. On the other hand, the defendants have not settled, which indicates that the SEC's claims may not be as clear as it claims.
The SEC is charging the individuals with violations of Section 17(a) of the Securities Act of 1933 and the fraud provisions of the Securities Exchange Act of 1934 (Section 10b-5) as well as and Rule 10b-5. The defendants have also been charged with violating the securities registration provisions of Section 5(a) and 5(c) of the Securities Act, as well as Sections 206(1) and (2) of the Investment Advisers Act of 1940. The SEC is seeking financial penalties and disgorgement of ill-gotten gains as well as permanent injunctive relief.
The SEC's securities fraud complaint is online, as is their press release.
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