Soreide Law Investigating Claims On Behalf Of 1 Global Investors

Soreide Law Group is investigating claims on behalf of those who invested in 1 Global Capital, LLC – a private company headquartered in Hallandale Beach, Florida. On September 7, 2018, the Securities and Exchange Commission (“SEC”) filed a Complaint against 1 Global and its previous chief executive officer, Carl Ruderman, alleging that 1 Global and Ruderman committed securities fraud. United States Securities and Exchange Commission vs. 1 Global Capital, LLC, Carl Ruderman, et al. Case #18-cv-61991-BB.
The SEC’s Complaint stated that 1 Global and Ruderman engaged in unregistered securities offering fraud, victimizing investors across the United States. Particularly, from February 2014 to July 2018, 1 Global and Ruderman deceptively raised over $287,000,000.00 from at least 3,400 investors in order to fund its business of providing financing to small-sized and medium-sized businesses.
1 Global allegedly relied upon unregistered investment advisers and barred brokers to offer and sell unregistered securities. The Complaint stated that the company’s sales agents made promises to investors of generating high investment returns while investing on a low-risk basis. Investors were apparently told that their money would be used for making Merchant Cash Advances (short-term cash advances) to businesses that were unable to procure other forms of financing like bank loans.

SEC Files Fraud Charges Against 1 Global

The SEC stated that 1 Global used a significant amount of funds from investors for reasons that had nothing to do with cash advances. According to the SEC, 1 Global used investor funds to pay operating expenses and to buy long-term credit card debt that was already in a distressed state. Moreover, the company and Ruderman allegedly misappropriated $35,000,000.00 of investor funds in the process. Of that $35,000,000.00, an estimated $28,000,000.00 was provided to: Ruderman; companies Ruderman controlled or owned; and companies owned by acquaintances and relatives of Ruderman that were uninvolved with any cash advance business of 1 Global. The SEC also alleged that Ruderman misappropriated investors funds by paying for his vehicle and vacation expenses.
1 Global and its sales agents were alleged to have misrepresented and omitted information regarding investments in the company. In particular, the company and its sales representatives: falsely stated that the company’s only use of investor funds was for funding Merchant Cash Advances;  deceptively represented the amount of investor funds that the company would take for its own purposes; provided investors with account statements that falsely portrayed rates of return and account balances; and made inaccurate statements concerning endorsements from an independent auditor regarding the business model used by the company.
The Complaint further alleged that by 1 Global and Ruderman misappropriating money from investors, the company incurred a $23,000,000.00 shortage of investor funds by October 2017. Those funds were apparently supposed to have been available within the bank accounts of the company to be used for the merchant loans. The shortfall was alleged by the SEC to have accumulated to $50,000,000.00 by June 30, 2018.
The Complaint also stated that in July 2018, 1 Global filed for bankruptcy, which has caused investors to be at risk of sustaining substantial losses. The SEC stated that despite Ruderman’s departure from 1 Global, he still has access or control over the entities which have obtained funds from investors that were misappropriated by 1 Global.
The SEC contended that 1 Global and Ruderman committed violations of Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934; Rule 10b-5; and Section 5(a), 5(c) and Section 17(a) of the Securities Act of 1933. In addition, SEC stated that Ruderman aided and abetted the violations committed by 1 Global, and also violated Section 20(a) of the Securities Exchange Act of 1934. The SEC requested that 1 Global and Ruderman pay civil penalties and be disgorged of illicit gains.

Investors who have incurred losses from 1 Global and Carl Ruderman are encouraged to contact Soreide Law Group at (888) 760-6552 for a free consultation. Our firm has recovered millions of dollars for investors who have suffered losses. We represent clients on a contingency fee basis and advance all costs.