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

TESTIMONIALS

Previous
Next

If you find yourself in trouble with the regulators, call Eccleston Law, you won't regret it.

Rick R.

LATEST NEWS AND ARTICLES

February 27, 2026
Eighth Circuit Rejects Emergency Injunction in Advisor Departure Dispute

A federal appeals court ruled against an advisory firm seeking immediate, injunctive relief after a team of advisors left with hundreds of millions in client assets.

February 26, 2026
FINRA Bars Former Cambridge Advisor After Refusal to Cooperate With Communications Probe

A former advisor affiliated with Cambridge Investment Research has been barred from the securities industry after declining to comply with a regulatory investigation, according to the Financial Industry Regulatory Authority (FINRA).

February 25, 2026
Advisors Increase Crypto Allocations as Merrill Lynch Warns of Significant Risks

Financial advisors are placing more client assets into digital currencies, even as major firms caution investors about the asset class's volatility and speculative nature.