SEC charges unregistered brokers who have sold fraudulent securities


The Securities and Exchange Commission imposed a fee two unregistered Arizona-based brokers for the sale of a total of $ 50 million in real estate funds managed by EquiAlt of Florida that were charged in February 2020 for running a Ponzi-like program.

According to the SEC complaint filed in federal court in Arizona, Ronald Frank Stevenson and his company have American Financial Security raised more than $ 19 million for unregistered offering of more than 100 Investors, which resulted in commissions of roughly $ 1.9 million. Jason P. Wootten and his company Family Tree Estate Planning were sold $ 32 million of the alleged fraudulent investments resulting in commissions of $ 3.7 million. None of their companies were registered as brokers / traders.

Stevenson and Wootten has not returned requests for comments at the time of going to press.

EquiAlt Claims are made to use investor money to buy property in “distressed markets” across the country, promising investors interest rates of 8% to 10% per annum.

But those deals were unprofitable “almost from the start,” and the company soon began using new investor money to pay interest to current investors, according to the SEC. The commission filed an emergency freeze in February 2020, with a court issuing an injunction and an asset freeze. Many investors were older or retired and were drawn to the funds on the assumption that they were “safe, low-risk and conservative”.

The SEC’s 2020 action against CEO Brian Davison and CEO Barry Rybicki claims they have raised more than $ 170 million from around 1,100 investors in 35 states.

EquiAlt used a network of unregistered brokers, including Wootten and Stevenson, to run the program. According to the complaint, Wootten met Rybicki in 2016 and agreed to sell EquiAlt securities for a commission of 8%. He began recommending the funds to Family Tree’s clients, including many who had originally approached the company to help prepare a living trust.

“Many of these investors were unaccredited, undemanding and elderly people who invested through their IRA accounts,” the SEC complaint read.

Stevenson has been soliciting clients for EquiAlt funds for more than five years and, according to the complaint, has continued to reassure investors about the risk of the fund and the EquiAlt model. To attract investors, he placed advertisements in local newspapers and provided investors with marketing materials.

Investors before filed a class action lawsuit against EquiAlt following the SEC’s enforcement action against the company in February last year and lawsuit grew to include an attorney and several Florida-based law firms Investors believed they helped continue the Ponzi-like system. The SEC is seeking disgorgement with the interests of Wootten and Stevenson, as well as financial sanctions.


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