SEC Charges Angel Oak Capital Advisors with Misleading Investors

Posted on August 25th, 2022 at 2:15 PM
SEC Charges Angel Oak Capital Advisors with Misleading Investors

From the Desk of Jim Eccleston at Eccleston Law.

The Securities and Exchange Commission (SEC) has charged Angel Oak Capital Advisors and its manager Ashish Negandhi for misleading investors regarding the firm’s fix-and-flip loan securitization’s delinquency rates.

As part of a settlement, Angel Oak has agreed to pay a penalty of $1.75 million while Negandhi will pay $75,000. According to the SEC, the Atlanta-based firm raised $90 million in March 2018 via a first-of-its-kind securitization of loans provided to borrowers for the purpose of purchasing, renovating, and selling residential properties. The product, known as “fix-and-flip” loans, included a provision to accelerate Angel Oak’s obligation to return funds to specific investors if delinquencies reached a predetermined level. However, loan delinquency rated unexpectedly skyrocketed shortly after closure of the deal.

In an effort to avoid reputational and financial harm to its securitization business, Angel Oak and Negandhi improperly decreased delinquency rates by fraudulently siphoning funds that were set aside to reimburse borrowers, to instead cover outstanding loan balances, according to the SEC. By failing to disclose their conduct to investors, the performance data regularly provided to investors constituted an inaccurate reporting of the actual delinquency rates on the mortgages in the securitization fund. Angel Oak and Negandhi agreed to the settlement without admitting or denying any of the SEC’s investigatory findings.

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, regulatory and disciplinary matters.

Tags: eccleston, eccleston law, advisors, law, sec

Return to Archive



I learned two important things working with Eccleston Law. First, I made a friend and ally with Jim and Steph for life. Secondly, and this is a crucial life lesson - if you need counsel, then seek out the very best. Jim was referred to me by a most trusted source. I've never had to hire an attorney for anything. Now, I know the value of hiring an important partner. Meticulous, thorough and detailed in preparation is the best way to describe Jim. Brilliant too, I might add. Bottom line, I would highly highly recommend Jim and Stephany for your legal needs. One of the best life decisions I've ever made.

Howard S.


September 26, 2023
Looming Real Estate Crisis Poses Risk to U.S. Banking Sector

With the current downturn in the commercial real estate market, trillions of dollars in loans and investments pose a looming threat to both the banking industry and potentially the broader economy.

September 25, 2023
Legal Challenges Over 'Money-for-Nothing' Payments Gain Momentum

Apollo Global Management and Carlyle Group, two major private equity firms, now face investor lawsuits regarding payments made to insiders without apparent justification.

September 22, 2023
State Regulators Maintain Opposition to FINRA's Remote Supervision Pilot Program

The North American Securities Administrators Association (NASAA) and the Public Investor Advocate Bar Association (PIABA) has consistently opposed the Financial Industry Regulatory Authority's (FINRA) proposal for a voluntary three-year pilot program for remote inspections.