The SEC’s complaint alleges that Skinner, who touted himself to investors as a successful real estate investor and dealmaker, made multiple misrepresentations to investors and misappropriated millions of dollars of investor funds. The SEC contends that Skinner told investors their money would be used to finance specific real estate projects or investments, projecting and, in some cases, guaranteeing double-digit annual returns. The SEC alleges that instead Skinner spent substantial amounts of investor funds on his personal expenses, including European vacations and payments for a Maserati and an Aston Martin. The SEC also alleges that Skinner used investor money to pay operational and marketing expenses unrelated to the specific projects, and to make Ponzi-like payments to other investors. According to the SEC’s complaint, Skinner owes investors millions of dollars, and he falsely blamed the COVID-19 pandemic for his failure to pay them, telling investors their money was safe when in fact he had spent it all. The SEC alleges that Skinner used these false statements to pressure certain investors to extend their investment terms.
The SEC’s complaint, which was filed in the Central District of California, charges Skinner, Empire West, Longacre Estates, Bayside Equity, Freedom Equity Fund, and Simple Growth with violating the securities registration requirements of Sections 5(a) and 5(c) of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also charges Skinner with violating the broker-dealer registration requirements of Section 15(a) of the Exchange Act. The complaint seeks permanent injunctions, disgorgement, prejudgment interest, and civil penalties. The complaint also seeks conduct-based injunctions against Skinner that permanently enjoin him or any entity under his control from raising money through unregistered offerings and from obtaining or receiving money related to or derived from Longacre Estates LP or Bayside Equity LP, or their underlying real estate projects.
Looking for a securities lawyer? Have a securities law question? Call Sallah Astarita & Cox at 212-509-6544.
