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1st Global Capital Fraud and/or Investment Loss Customer Complaint Disclosures

INVESTOR FRAUD ALERT—The SEC Has Launched An Investigation Into 1st Global Capital And 1st West Capital Regarding Suspected $283 Million Loan Fraud

The Wolper Law Firm, P.A. has launched an investigation into 1 Global Capital and 1 West Capital, two Hallandale, Florida based businesses suspected of being involved in a $283 million loan scheme involving hundreds of investors.   On July 27, 2018, 1st Global Capital and 1st West Capital filed for bankruptcy in the District Court for the Southern District of Florida.

According to its website, 1st Global Capital and 1st West Capital are affiliated with 1st Global Capital Financial Services, which provides fast, small business financing through specialized solutions.  1st Global Capital and 1st West Capital have served a variety of businesses, including automotive, e-commerce, events, franchise, hospitality, restaurant and transportation.

1st Global Capital and 1st West Capital raised capital to fund their business operations through private loans from retail investors, typically payable in nine months.  The companies offered investors a high interest rate in exchange for their investment.

According to the unaudited books and records of 1st Global Capital and 1st West Capital, the companies have approximately $238 million of accounts receivable, $21 million of intercompany accounts, and $17.3 million in unrestricted cash.  The books and records also reflect outstanding loans of $283 million.

Before 1st Global Capital and 1st West Capital filed for bankruptcy, the Securities and Exchange Commission (SEC) opened an investigation into the companies’ activities.  Specifically, the SEC is investigating whether the loans sold to investors required registration and whether said loans were sold to investors through unregistered brokers.  Based on information gathered by the SEC, it is has been in communication with the United States Attorneys’ Office and is assessing potential violations of applicable securities laws.

What appears clear at this point is that investors who invested in the loan scheme will very likely lose a considerable amount of their investment even after the outstanding accounts receivable are collected by the bankruptcy receiver.

This purported ponzi scheme resembles the $1.2 billion Woodbridge Wealth ponzi scheme that was uncovered in late 2017.  Similar to 1st Global Capital and 1st West Capital, Woodbridge used unregistered brokers to sell promissory notes to investors with the promise of above-average returns.

If you or someone you know invested in loans offered by 1st Global Capital and 1st West Capital, please contact the Wolper Law Firm, P.A. at 800.931.8452 or by email at mwolper@wolperlawfirm.com to discuss your specific situation and the legal options available.  The Wolper Law Firm, P.A. represents investors nationwide in securities litigation and arbitration.

Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities.  Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters.

INVESTOR UPDATE—How Can I Recover My Investment In 1st Global Capital And 1st West Capital?

What Is Known So Far

On July 27, 2018, 1st Global Capital and 1st West Capital filed for bankruptcy protection in the Southern District of Florida.  It was revealed in bankruptcy court filings that the “Securities and Exchange Commission (SEC) opened an investigation into the companies’ activities related to alleged possible securities law violations, including the alleged offer and sale of unregistered securities, the alleged sale of securities by unregistered brokers, and the alleged commission of fraud in connection with the offer, purchase and sale of securities.” 

The United States Attorney has since opened a parallel investigation into the business practices of the companies.  The investigation is ongoing and more will develop in the coming days and months.

Right now, investors are classified as creditors and will not receive a distribution of any assets unless approved by the bankruptcy court.  Distributions traditionally do not occur until the end of the bankruptcy proceeding, which could take years, and generally amount to cents on the dollar.

What Is 1st Global Capital And 1st West Capital’s Business Structure?

1st Global Capital, LLC and 1st West Capital, LLC are based in Hallandale, Florida.  The companies operate in the financial services industry, offering direct merchant cash advances to small businesses across the United States.  Through independent sales organizations, underwriters and other funding agents, the companies offer a variety of short-term cash advances.  The companies raise capital to finance their business operations through private loans typically repayable in nine months.  The loans are memorialized by promissory notes.

How Did 1st Global Capital And 1st West Capital Raise Money?

It is alleged that registered and unregistered brokers and investment advisors sold promissory notes issued by 1st Global Capital, LLC and 1st West Capital, LLC to retail investors.  The promissory notes were marketed as safe, short term, fixed income instruments that could generate above-average rates of return for investors.  Investors were neither aware that 1st Global Capital, LLC and 1st West Capital, LLC were in a precarious financial condition nor that the companies were being investigated by the SEC and US Attorneys’ office for securities fraud.

What Should I Do If I Invested In 1st Global Capital Or 1st West Capital?

You should immediately contact a qualified securities lawyer to evaluate your recovery options.  If promissory notes issued by 1st Global Capital or 1st West Capital were recommended to you by a Financial Advisor, Investment Advisor, Brokerage Firm, Insurance Agent or financial services industry professional, you may be able to pursue claims against those individuals and entities to recover the entirety of your investment losses.  In most states, financial services industry professionals have a fiduciary duty to conduct appropriate due diligence regarding an investment prior to making a recommendation.  In the absence of appropriate due diligence, causes of action may exist under both state and federal law, including violation of applicable securities laws.  These claims may be pursued in FINRA arbitration, arbitration through another forum or, in the absence of an arbitration agreement, in court.

If you or someone you know were sold promissory notes issued by 1st Global Capital or 1st West Capital, and you experienced investment losses, please contact the Wolper Law Firm, P.A. at 800.931.8452 or by email at mwolper@wolperlawfirm.com to discuss your specific situation and the legal options available.  The Wolper Law Firm, P.A. represents investors nationwide in securities litigation and arbitration.

Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities.  Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters.

Did You Invest In 1st Global Capital Or 1st West Capital Through Pinnacle Plus Financial a/k/a Pinnacle Plus Wealth Management in Overland Park, Kansas?

The Wolper Law Firm, P.A. is currently investigating claims against Pinnacle Plus Financial a/k/a Pinnacle Plus Wealth Management, LLC in Overland Park, Kansas.  The Wolper Law Firm, P.A. has been contacted by investors of Pinnacle Plus Financial a/k/a Pinnacle Plus Wealth Management, LLC, who were sold unregistered promissory notes issued by 1st Global Capital, LLC and 1st West Capital, LLC.

On August 13, 2018, the Wolper Law Firm, P.A. announced that it was investigating potential securities fraud violations perpetrated by 1st Global Capital and 1st West Capital, which filed for bankruptcy protection on July 27, 2018 in the Southern District of Florida.  It was revealed in bankruptcy court filings that the “Securities and Exchange Commission (SEC) opened an investigation into the companies’ activities related to alleged possible securities law violations, including the alleged offer and sale of unregistered securities, the alleged sale of securities by unregistered brokers, and the alleged commission of fraud in connection with the offer, purchase and sale of securities.” 

The United States Attorney has since opened a parallel investigation into the business practices of the companies.

On August 23, 2018, the SEC filed a Complaint for Injunctive Relief against 1st Global Capital, 1st West Capital, Carl Ruderman and various entities controlled by Carl Ruderman.  The SEC’s Complaint was originally filed under seal but, on August 29, 2018, was released to the public.  The ten count Complaint alleges securities fraud.

The SEC alleges “1st Global, a private South Florida firm, fraudulently raised more than $287 million from more than 3,400 investors to fund its business of offering short-term financing to small and medium-sized businesses.  1st Global used a network of bared brokers, registered and unregistered investment advisers, and other sales agents—to whom they paid millions in commissions—to offer and sell unregistered securities to investors in no fewer than 25 states.”

During the course of the SEC’s investigation, it found that 1st Global and its principal, Carl Ruderman, “misappropriated at least $35 million of investor money, at least $28 million of which was paid (1) directly to Ruderman…to fund Ruderman’s lavish expenses such as a luxury vacation to Greece and monthly payments for his Mercedes Benz.  1st Global and its sales representatives also made numerous other material misrepresentations and omissions to investors…and violated Section 17(a) of the Securities Act of 1933…and Section 10(b) and Rule 10b-5 of the Exchange Act.”

The SEC also alleges that 1st Global falsely represented to customers that its books and records were audited by an accounting firm when, in actuality, the accounting firm ceased working with 1st Global in 2016.

Investments advisers, like Pinnacle Plus Financial a/k/a Pinnacle Plus Wealth Management, LLC, sold 1st Global Capital promissory notes to individual investors and marketed them as safe, conservative, income producing securities.  It was not disclosed that the 1st Global Promissory notes required registration under federal and/or state law.  Violation of the registration provisions of federal and state securities laws may entitle investors to a full return of principal, plus interest, from the investment advisor who unlawfully recommended the unregistered securities.

Some of the key principals of Pinnacle Plus Financial a/k/a Pinnacle Plus Wealth Management, LLC have reported regulatory events on their Investment Adviser Public Disclosure forms maintained by the SEC.  Matt Walker, the CEO, and Jeff Tupper, the Regional President, were both terminated from their previous employers after it was alleged they participated in unauthorized outside business activities.  This practice is referred to as “selling away” and is strictly prohibited in the securities industry.

If you or someone you know was a customer of Pinnacle Plus Financial a/k/a Pinnacle Plus Wealth Management, LLC, or were sold promissory notes issued by 1st Global Capital or 1st West Capital, and you experienced investment losses, please contact the Wolper Law Firm, P.A. at 800.931.8452 or by email at mwolper@wolperlawfirm.com to discuss your specific situation and the legal options available.  The Wolper Law Firm, P.A. represents investors nationwide in securities litigation and arbitration.

Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities.  Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters.

Did You Invest In 1st Global Capital Or 1st West Capital Through KNR Consulting Or Kevin Richards In Laguna Niguel, California

The Wolper Law Firm, P.A. is currently investigating claims against KNR Consulting and its principal, Kevin Richards.  The Wolper Law Firm, P.A. has been contacted by investors of Kevin Richards, who were sold unregistered promissory notes issued by 1st Global Capital, LLC and 1st West Capital, LLC.

On August 13, 2018, the Wolper Law Firm, P.A. announced that it was investigating potential securities fraud violations perpetrated by 1st Global Capital and 1st West Capital, which filed for bankruptcy protection on July 27, 2018 in the Southern District of Florida.  It was revealed in bankruptcy court filings that the “Securities and Exchange Commission (SEC) opened an investigation into the companies’ activities related to alleged possible securities law violations, including the alleged offer and sale of unregistered securities, the alleged sale of securities by unregistered brokers, and the alleged commission of fraud in connection with the offer, purchase and sale of securities.” 

The United States Attorney has since opened a parallel investigation into the business practices of the companies.

1st Global Capital, LLC and 1st West Capital, LLC are based in Hallandale, Florida.  The companies operate in the financial services industry, offering direct merchant cash advances to small businesses across the United States.  Through independent sales organizations, underwriters and other funding agents, the companies offer a variety of short-term cash advances.

The companies raise capital to finance their business operations through private loans typically repayable in nine months.  The loans are memorialized by promissory notes.

It is alleged that unregistered brokers sold promissory notes issued by 1st Global Capital, LLC and 1st West Capital, LLC to retail investors.  The promissory notes were marketed as safe, short term, fixed income instruments that could generate above-average rates of return for investors.  Investors were neither aware that 1st Global Capital, LLC and 1st West Capital, LLC were in a precarious financial condition nor that the companies were being investigated by the SEC and US Attorneys’ office for securities fraud.  It has become apparent that the individuals recommending investments in 1st Global Capital and 1st West Capital failed to conduct an appropriate level of due diligence regarding these investments and, consequently, may have breached legal duties owed to their clients.

If you or someone you know was a customer of KNR Consulting and its principal, Kevin Richards, or were sold promissory notes issued by 1st Global Capital or 1st West Capital, and you experienced investment losses, please contact the Wolper Law Firm, P.A. at 800.931.8452 or by email at mwolper@wolperlawfirm.com to discuss your specific situation and the legal options available.  The Wolper Law Firm, P.A. represents investors nationwide in securities litigation and arbitration.

Matt Wolper, the Managing Principal of the Wolper Law Firm, P.A., is a trial lawyer who has handled hundreds of securities cases during his career involving a wide range of products, strategies and securities.  Prior to representing investors, he was a partner with a national law firm, where he represented some of the largest banks and brokerage firms in the world in securities matters.

Attorney Matthew Wolper

Attorney Matthew WolperMatt Wolper is a trial lawyer who focuses exclusively on securities litigation and arbitration. Mr. Wolper has handled hundreds of securities matters nationwide before the Financial Industry Regulatory Authority (FINRA), American Arbitration Association (“AAA”), JAMS, and in state and federal court. Mr. Wolper has handled and tried cases involving complex financial products and strategies ranging from traditional stocks and bonds to options, margin and other securities-based lending products, closed/open-end mutual funds, structured products, hedge funds, and penny stocks. [Attorney Bio]