SEC accuses Florida lawyer of greenlighting sale of unregistered securities
The Securities and Exchange Commission (SEC) has filed civil lawsuits against a “longtime” Florida securities attorney accused of aiding and abetting “an alleged US $ 322 million securities fraud.
Simultaneous criminal charges were laid on Sept. 17 against District Attorney Jan Douglas Atlas, 74 of Ft. Lauderdale, Fla.
The SEC and the South Florida District Attorney’s Office say letters produced by Atlas were used to reassure a large network of commission salespeople that tickets issued by a “cash advance company based in Florida now bankrupt “1 Global Capital LLC were not securities.
Regarding the cases, the September 17 press release from the SEC states:
“… Jan D. Atlas, while a partner in a Fort Lauderdale-based law firm that acted as outside counsel for 1 Global, wrote two op-ed letters in which he knowingly falsified or omitted material facts and expressed the opinion that 1 Global’s ratings were probably not securities. The complaint alleges that 1 Global used the op-eds to falsely represent to a network of outside sales agents that its tickets were not securities and that its offer did not have to be registered with the SEC. 1 Global would then have encouraged thousands of retail investors to invest hundreds of millions of dollars in its notes.
Atlas would have made a percentage of the commissions generated by the sale of 1 Global tickets. Atlas’s proceeds totaled more than $ 627,000, funds he allegedly did not disclose to partners at his law firm.
According to the South Florida District Attorney’s Office, 1 Global sold securities to provide a fund base for its commercial payday lending operations:
“… 1 Global Capital LLC (1 Global) was a Hallandale Beach, Florida-based commercial lending company that provided the equivalent of“ payday ”loans to small businesses at high interest rates. To fund these cash advance loans to traders, 1 Global has secured funds from investors nationwide, offering short-term investment contracts. Investors would be expected to receive a proportional share of the principal and interest payments as the loans are repaid. 1 Global has raised funds using investment advisers and other intermediaries, with promises of large commissions. In many cases, the commissions have not been fully disclosed to investors.
1 Global, however, had serious solvency problems:
“According to court records, 1 Global operated from early 2014 until approximately July 27, 2018, when it filed for bankruptcy. At that time, 1 Global had more than 3,600 investors and had raised more than $ 330 million, and its own internal documents showed a cash shortfall of $ 50 million.
If convicted, “Atlas faces a maximum sentence of five years in prison and a fine of up to $ 10,000. ”
Former 1 Global CFO, Alan G. Heide, pleaded guilty on August 23 to one count of conspiracy to commit securities fraud in connection with the 1 Global scheme. He will be sentenced on December 12 in Fort. Lauderdale by US District Judge Roy K. Altman.
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