Tr?id=566623520170033&ev=PageView&noscript=1

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
Quotes Bigger

You are the best attorneys in the country.

CC

LATEST NEWS AND ARTICLES

1784303575 Law
July 17, 2026
FINRA Arbitrators Award $2.25 Million Over Life Insurance Strategy

A former financial advisor must pay $2.25 million to clients who alleged he recommended a high-risk life insurance strategy that resulted in significant losses, according to a Financial Industry Regulatory Authority (FINRA) arbitration award.

1784228879 Law
July 16, 2026
Delaware Judge Dismisses United Capital's Poaching Lawsuit Against Osaic With Leave to Amend

A Delaware judge has dismissed United Capital's lawsuit accusing Osaic of improperly recruiting financial advisors and soliciting client assets, but allowed the wealth management firm to file an amended complaint, according to AdvisorHub.

1784134373 Law
July 15, 2026
LPL Financial Faces Class Action Over Phoenix Annuity Disclosures

LPL Financial faces a proposed class action lawsuit alleging that the firm failed to warn annuity investors about the declining financial condition of Phoenix PHL Variable Insurance Company.