SEC Obtains Final Judgments Against Broker and Two Principals Found Liable for Fraud
Judge Kimba M. Wood of the United States District Court for the Southern District of New York entered final judgments ordering more than $1.6 million in monetary relief against broker-dealer Portfolio Advisors Alliance, its owner Howard Allen, and its president, Kerri Wasserman, following a jury verdict that found them liable for securities fraud.
Judge Kimba M. Wood of the United States District Court for the Southern District of New York entered final judgments ordering more than $1.6 million in monetary relief against broker-dealer Portfolio Advisors Alliance, its owner Howard Allen, and its president, Kerri Wasserman, following a jury verdict that found them liable for securities fraud.
The offering raised approximately $8.6 million from investors from March 2011 to December 2013.
In its original complaint, the SEC alleged that American Growth Funding II, which raised capital from investors to provide loans to businesses, and its owner Ralph Johnson, promised investors 12 percent annual returns and falsely claimed in offering documents that its financial statements were being audited each year.
The SEC further alleged that Portfolio Advisors Alliance, Allen, and Wasserman knew the offering documents were inaccurate yet continued using them to solicit sales of American Growth Funding II.
In May, the jury found Portfolio Advisors Alliance, Allen and Wasserman liable on all counts, finding that they violated the certain antifraud provisions of Securities Acts of 1933 and 1934.
The court’s final judgment enjoins the defendants from future violations of the antifraud provisions, orders Portfolio Advisors Alliance and Allen to jointly pay $1.06 million in disgorgement and prejudgment interest, Allen to pay an additional $205,100 in disgorgement and prejudgment interest.
In addition, Portfolio Advisors Alliance, Allen and Wasserman must pay civil penalties of $200,000, $120,000, and $100,000, respectively.
Earlier this year, the SEC obtained a final consent judgment against American Growth Funding II and Johnson, who was charged with lying to investors who purchased the high-yield securities. He was ordered to pay $363,700 in disgorgement and prejudgment interest and a $75,000 civil penalty.
