Charges have been announced against registered investment adviser A.G. Morgan Financial Advisors, LLC (“AGM”) of Massapequa, New York, a registered investment adviser, their former Chief Compliance Officer James McArthur, and owner Vincent J. Camarda, by the Securities and Exchange Commission (SEC).
These charges are in connection with AGM offering and unlawfully selling securities connected with lending company Complete Business Solutions Group Inc., d/b/a Par Funding, and their unregistered and fraudulent offering of over $500 million.
Par Funding, and some others, have been earlier charged by the SEC for raising hundreds of millions of dollars from investors across the country and operating a fraudulent scheme.
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Over $200 million was raised from 75 investors between August 2017 and July 2020 in connection with the unregistered offering of securities of Par Funding. In doing so, they earned compensation exceeding $7 million.
SEC’s allegation is that the money was raised through the offer and sale of securities without the approval of the broker-dealer they were registered with.
In addition, Camarda and AGM failed to notify their advisory clients about the fact of AGM had borrowed approximately $750,000 from Par Funding which had not been fully repaid.
The complaint was filed in federal court in the Eastern District of New York. The charges in the complaint against Camarda, McArthur, and AGM are:
- Violation of the registration provisions of the Securities Act of 1933
- Violation of the Securities Exchange Act of 1934 by acting as unregistered brokers
Only AGM and Camarda were charged with the violation of the antifraud provisions of the Investment Advisers Act of 1940.
The SEC has sought:
- disgorgement plus prejudgment interest
- civil monetary penalties.
- permanent injunctions
- Christine M. Hernandez and Crystal C. Ivory of the Miami Regional Office conducted the investigation on behalf of SEC.
- Mary Beth Lynch, Raymond J. Slezak and Michael P. O’Donnell from the Division of Examinations assisted them in the investigations.
- Investigations were supervised by Fernando Torres, Glenn S. Gordon and Elisha L. Frank.
- Under the supervision of Teresa Verges, Annie R. Berlin will lead the litigation.
- The assistance of the Financial Industry Regulatory Authority (FINRA) was acknowledged and appreciated by the SEC.
The foregoing is based on Litigation Release No. 25418 / June 10, 2022 with respect to Securities and Exchange Commission v. A.G. Morgan Financial Advisors, LLC et al., No. 2:22-cv-03421 (E.D.N.Y. filed June 9, 2022).