In a federal district court in Oregon, the Securities and Exchange Commission charged Aequitas Management LLC and its three top executives with allegedly defrauding investors. According to the complaint, the investment group allegedly hid the decline in its financial situation while raising upwards of $350 million from various investors.
The company and four affiliates are accused of defrauding over 1,500 customers across the nation. They allegedly led the investors to believe that the investments they were making would be in the healthcare, education, and transportation industries. Instead, the company allegedly used the funds to help save the firm, even paying older investors with the money received from new investors.
According to the complaint filed by the SEC, from January 2014 to January 2016, Aequitas Management LLC allegedly issued customers promissory notes supposedly paying up 10 percent annually. The company allegedly used the majority of customer funds in student loan receivables of Corinthian Colleges, a non-profit educator. When Corinthian defaulted, it hampered an already severe financial problem for Aequitas.
The executives are accused of using investor money to fund their salaries, private jet, and outings that they used to raise more funds from investors. Just last month, the SEC says that the firm was forced to dismiss a large majority of its employees after they were no longer able to meet scheduled redemptions. According to the SEC, Aequitas and affiliates have agreed to temporarily halt raising funds and agreed to a receiver to prevent defrauding investors.
In addition to monetary penalties and injunctive relief the SEC also seeks to permanently bar the executives who were allegedly involved from serving as directors or officers of any public company.
If you invested and lost money with Aequitas Management LLC, our securities fraud attorneys at Meyer Wilson may be able to help you. Schedule a free consultation today.