The Securities and Exchange Commission filed charges against Michael J. French and MJF Holdings, LLC and MJF Capital, LLC, accusing them of defrauding and misappropriating millions in investor funds. The lawsuit was lodged in the United States District Court for the Northern District of Georgia, on April 3, 2023.
According to the SEC complaint, French sold more than $20 million worth of high-yielding promissory note to over 400 investors in the United States. According to the SEC’s complaint, French allegedly misled investors by saying that the notes would be backed by an investment program with low risk that would yield a return of 12% on a year-long investment. French claimed that the proceeds of the notes would go to invest in commercial loans or to provide small businesses with money. This would minimize the risk to investors. The SEC claims that the lending program was a scam, and French used funds to pay back investors and fund an extravagant lifestyle. French eventually defaulted on his notes and stopped communicating with investors.
In its complaint, the SEC charges French and MJF Holdings of violating the Securities Act of 1932’s antifraud provisions and Section 10(b), as well as Rule 10b-5 and Section 10(b) of Securities Exchange Act of 1934. MJF Capital has also been charged with aiding French and MJF Holdings to commit their alleged fraud. French is also listed as a relief defendant for seven other entities.
The SEC seeks permanent injunctive remedies, a freezing of assets, an accounting, the disgorgement and prejudgment interests of all gains, civil penalties, and an end to all illegal activities.
Grant Mogan, Andrew D. Mason and Tiffany Kunkle, all from the Atlanta Regional Office with Taryn hairston’s assistance, conducted the investigation. Thomas B. Bosch supervises the case, while Justin C. Jeffries is in charge of litigation. Kristin Munahan and Graham Loomis conduct litigation.
This case should serve as a reminder for investors to be careful, to conduct due diligence thoroughly before investing, and to be skeptical of promises that high returns can come with low risks. The SEC continues to protect investors from fraud schemes and hold perpetrators accountable.
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SEC
Securities and Exchange Commission is an American regulatory agency that supervises and enforces federal security laws. Its main mission is to protect and promote investors, ensure fair and efficient markets and encourage capital formation.
The SEC makes sure that companies who provide securities to the public are transparent and accurate, so investors can make an informed decision. It regulates securities companies, such as stock exchanges, brokers, and investment advisers by establishing rules and standards that promote transparency and help prevent fraud.
The SEC plays an important role in enforcing securities laws, as well as its regulatory role. The SEC conducts investigations and brings charges against individuals and businesses involved in securities crimes, insider dealing, and other violations. The SEC can impose civil penalties and seek injunctions to protect investors.
SEC is also involved in educating and informing the public about financial markets and investing. It offers resources, guidelines and investor alerts that help people make informed investments and avoid scams.
Overall, the SEC acts as a vital watchdog to the U.S. financial industry. It ensures fair, transparent markets, protects investors and promotes capital formation for business.
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