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SEC Charges Manhattan Based Lending Company with Fraud

The Securities and Exchange Commission charged American Growth Funding II (AGF II), a Manhattan-based lending company and its owner of repeatedly lying to investors purchasing high-yield securities. The SEC also charged the brokerage firm that acted as the placement agent and two of its executives.

The SEC alleges that American Growth Funding II LLC and Ralph Johnson promised investors 12-percent annual returns and falsely claimed its financial statements were being audited each year. AGF II, which raises capital from investors to provide loans to businesses, also made misrepresentations in offering documents about its management and concealed details about deteriorating loan values that could imperil full payment of the promised returns to investors. While Portfolio Advisor Alliance (PAA) acted as a placement agent, PAA’s owner Howard Allen was aware about AGF II’s inaccurate offering documents, but continued using them. 

News Characteristics

Date : Mar 04, 2016
Region : North America
Industry : Capital Markets
Function : Risk Management
Sub-Function : Fraud Management