The SEC charged Singer Financial Corp. (SFC), a Philadelphia, Pennsylvania-based "hard money" lender, and Paul Singer, SFC's sole officer, director and shareholder, with operating an illegal and unregistered offering of securities.
The SEC's complaint alleges that Singer and SFC raised approximately $4.5 million from at least 70 investors between October 2012 and July 2015 through an illegal and unregistered offering of unsecured promissory notes.
According to the SEC's complaint, Singer and SFC conducted the unregistered offering without a registration statement in effect and without qualifying for an applicable exemption from registration. The SEC's complaint further alleges that Singer and SFC initially sought an exemption from registration for an offering of investment certificates, which were nearly identical to the promissory notes.
After the SEC staff questioned, among other things, the size and scope of significant non-interest bearing related party loans SFC made to Singer and other companies he owned, Singer abandoned his efforts to obtain an exemption and, instead, embarked on the illegal, unregistered offering of promissory notes.
According to the SEC's complaint, by failing to register the offering of promissory notes with the SEC, or otherwise qualify the offering for an exemption from registration, Singer and SFC deprived investors of critical information regarding the risks of investing in SFC and in unsecured promissory notes.
The SEC seeks permanent injunctions, which includes enjoining Singer from participating in future unregistered offerings; disgorgement; prejudgment interest; and penalties.
Fake EDGAR Filer Pleads Guilty to Securities Fraud Charges
Robert Murray, a defendant in ongoing SEC litigation, pleaded guilty on Nov. 7 to parallel criminal securities fraud charges filed by the U.S. Attorney for the Southern District of New York in connection with a scheme to manipulate Fitbit securities through fake filings on the SEC's EDGAR system.
The court accepted Murray's plea, and his sentencing is currently scheduled for March 9.
The SEC charged Murray on May 19 with securities fraud arising out of the same scheme. According to the SEC's complaint, Murray allegedly purchased Fitbit call options just minutes before a fake tender offer that he orchestrated was filed on the SEC's EDGAR system purporting that a sham company named ABM Capital LTD sought to acquire Fitbit's outstanding shares at a substantial premium.
Fitbit's stock price temporarily spiked when the tender offer became publicly available on Nov. 10, 2016, and Murray sold all of his options for a profit of approximately $3,100. Murray took steps to conceal his identity and actual location in Virginia, including using an alias to create an email account and using an IP address registered to a company located in California.
