SEC Charges Unregistered Brokers For Selling Securities to Retail Investors

Posted on March 24th, 2021 at 2:25 PM
SEC Charges Unregistered Brokers For Selling Securities to Retail Investors

From the Desk of Jim Eccleston at Eccleston Law LLC:

The Securities and Exchange Commission announced charges against Jason P. Wootten and Ronald Frank Stevenson and the companies they controlled for registration violations connected with their unlawful sales of securities of real estate funds to retail investors. EquiAlt LLC managed the real estate funds. The SEC previously filed an enforcement action against EquiAlt and its funds, alleging that they were operating a Ponzi scheme that raised more than $170 million from approximately 1,100 investors in 35 states. 

According to the complaint, Wootten and his company, Family Tree Estate Planning, LLC, sold over $32 million of the Fund's securities to more than 100 investors. Through Family Tree Estate Planning, Wootten received approximately $3.7 million in commissions from EquiAlt, even though neither Wooten nor his company was registered as a broker-dealer. 

The complaint also alleges that Stevenson and his company, American Financial Security, LLC, sold approximately $19 million of the Funds' securities to more than 100 investors. Stevenson, through the company, received roughly $1.7 million in commission, despite neither Stevenson nor American Financial Security being registered as a broker-dealer. 

The SEC has filed charges against Wotten, Stevenson, and their companies with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and the broker-dealer registration provisions of Section 15(a)(1) of the Securities Exchange Act of 1934. The SEC is also seeking disgorgement of ill-gotten gains with interest and financial penalties.

Eccleston Law LLC represents financial advisors nationwide. Please contact us to discuss any issues that you may have. 

Tags: eccleston, eccleston law, sec, unregistered brokers

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