SEC Charges Real Estate Investment Firm and Owner Over $100 Million Fraud

Posted on October 3rd, 2022 at 1:29 PM
SEC Charges Real Estate Investment Firm and Owner Over $100 Million Fraud

From the Desk of Jim Eccleston at Eccleston Law.

The Securities and Exchange Commission has charged Secured Income Group, Inc. along with its owner, Max McDermott, and its head investor relations representative, Stacey Porter, with fraud in a securities offering. The defendants raised $100 million between July 2017 and January 2021 from those who invested in the firm’s “Secured Debentures” offering.

The Orange County-based firm, at McDermott’s direction, informed investors that their funds would be pooled to make real estate loans secured by first lien positions on the underlying properties and that their investments were secured, according to the SEC. The SEC’s complaint alleged that Secured Income Group and McDermott departed from their intended business model, and subsequently misrepresented material details of the investment.

Secured Income Group failed to originate real estate loans and it additionally sold off millions of dollars of its loans along with the corresponding security interests, according to the SEC. Due to the change in course, the outstanding principal value of the firm’s real estate loan collateral had been substantially less than what it actually owed to investors. The SEC is seeking permanent injunctions, disgorgements and civil penalties against each defendant.

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

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

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