According to a Complaint filed on March 10, 2016 in Oregon federal district court, the SEC has brought claims against Aequitas Management, LLC (CRD# 143780/SEC# 801-68039) and three Aequitas executives, Robert J. Jesenik, Brian A. Oliver, and N. Scott Gillis for defrauding investors and for a breach of fiduciary duties.
Since 2014, Aequitas founder Mr. Robert Jesenik (CRD# 5331944) and his associates, Mr. Brian A. Oliver and Mr. N. Scott Gillis defrauded investors by making them believe that they were investing in a portfolio of trade receivables, healthcare, education, transportation, or consumer credit sectors. In actuality, investor funds were used to repay prior investors and to afford the firms excessive operating expenses. Investors were sold promissory notes issued by Aequitas Commercial Finance with interest rates generally between 5 and 15 percent.
The complaint alleges that even after one of the firms biggest investments defaulted on its obligations to Aequitas, Mr. Jesenik and Mr. Oliver continued to solicit millions of dollars to cover the firms increasing expenses and to avoid collapse. The SEC further alleged that Mr. Gillis, Aequitas’s CFO, concealed the firm’s distressed financial position from investors despite knowledge that Mr. Oliver and Mr. Jesenik were using new funds raised to pay off existing investors.
Specifically, the complaint alleges…
- “From January 2014 to January 2016, Aequitas raised money from investors by issuing promissory notes with high rates of return typically ranging from 8.5 to 10 percent.”
- “While Aequitas did use some investor money to acquire trade receivables in health care, education, transportation, and other consumer credit sectors, the vast majority was concentrated in student loan receivables of for-profit education provider Corinthian Colleges. Corinthian defaulted on its recourse obligations to Aequitas in mid-2014, which significantly exacerbated the firm’s already severe cash flow problems.”
- “The executives continued to draw their lucrative salaries, use a private jet, and attend posh dinner and golf outings, all at the expense of investors. They used the outings to raise more money from investors. Jesenik, Oliver, and Gillis took home at least $2.5 million in combined salaries during this period.”
- “By November 2015, Aequitas could no longer meet scheduled redemptions. Last month, the firm dismissed two-thirds of its employees and hired a chief restructuring officer.”
The SEC is seeking monetary penalties, permanent injunctions, and disgorgement with prejudgment interest. Aequitas Management LLC has already agreed to a preliminary enjoinment from raising additional funds through the offer and sale of securities.
Fishman Haygood represents investors who have suffered investment losses in claims against their brokers or financial advisors. Our experienced attorneys have brought securities fraud cases in state and federal courts across the nation, as well as in FINRA arbitration. We work to help investors recoup their losses.
Of course, all cases are different. For that reason, we analyze each client’s matter individually and provide our personalized evaluation only after considering all of the facts and circumstances of all possible claims. If you or someone you know is the victim of securities fraud, please contact a Fishman Haygood lawyer today.
