SEC v. Coadum

SEC Complaint against Coadum Advisors


The Complaint alleges that the defendants falsely represented to investors that they will receive a return of from 3 to 6% per month, misrepresented that their principal is protected and never leaves the escrow account; and failed to disclose that the defendants have made loans to themselves from the investor proceeds. The defendants transferred the majority of the funds to a Malta based "investment platform" which in turn appears to have placed the funds in a Bermuda hedge fund which has yet to begin operation, and in "Pre-REIT convertible bonds" which have yet to provide any return. The complaint alleges that the defendants have falsely represented in monthly account statements to investors that they have earned approximately 4% per month, and that all or most of their principal is in escrow. The complaint alleges that, without disclosure to investors, principals have also "borrowed" in excess of $3 million of, or against, the investors' funds and have disbursed approximately $5 million to related parties.

The Complaint alleges that all defendants violated Section 17(a) of the Securities Act of 1933 (Securities Act), and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and that defendants Coadum, Mansell, Jeffery and Repke further violated, Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 ("Advisers Act") [15 U.S.C. 15 U.S.C. §§ 80b-6 (1) and (2)].

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Reference Info:Pleadings | Federal, 11th Circuit, Georgia | United States

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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