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 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 at 800.931.8452 or by email at firstname.lastname@example.org to discuss your specific situation and the legal options available. The Wolper Law Firm represents investors nationwide in securities litigation and arbitration.
Matt Wolper, the Managing Principal of the Wolper Law Firm, 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.
- Investment Loss Recovery Options For Investors In The 1INMM Capital, LLC Ponzi Scheme Perpetrated By Actor Zachary Horwitz a/k/a Zachary Avery
- J.W. Cole Financial, Inc. Sanctioned by FINRA for Sales Practices Relating To Sales And Supervision Of LJM Preservation & Growth Fund
- Cambridge Investment Research, Inc., Sanctioned by FINRA for Sales Practices Relating To Sales And Supervision Of LJM Preservation & Growth Fund
- Former Torch Securities Broker Jeremy Johnson Barred By FINRA After Allegedly Making Misrepresentations To Customers
- Former Lincoln Douglas Investments Broker Herbert G. Frey Sanctioned By FINRA For Alleged Unauthorized Trading
- Two Customer Complaints Pending Against Ausdal Financial Partners, Inc. Investment Advisor and Broker Kurt Baldry
- Concorde Investment Services Broker, Mark Huber, Has Two Customer Complaints, Alleging Sales Practice Misconduct
- Unsuitability Allegations Pending Against Previously Registered Voya Financial Advisors, Inc. Financial Advisor and Broker David R. Wall
- Common Types of Alternative Investments
- Did You Purchase GPB Capital Holdings Private Placements Through McNally Financial Services Or Daniel Poland