SEC Scoffs at 1st Global Capital’s Attempt to Dismiss Securities Complaint

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The SEC is not impressed with 1st Global Capital’s attempt to dismiss the charges it stands accused of. Yesterday, the SEC filed opposition papers, writing “Having defrauded thousands of investors out of almost $300 million, Defendant Carl Ruderman now asks the Court to let him escape the consequences of his actions by dismissing the Amended Complaint against him based on a series of inaccurate and incomplete facts, incorrect legal standards, and infirm legal arguments.”

1st Global and Ruderman (who was the company’s owner and CEO), argued that the SEC does not have subject matter jurisdiction and that the notes between 1st Global and investors were not securities.

“Ruderman misstates the standards for evaluating whether a note is a security, and does not even bother to address the separate test for determining whether an investment qualifies as an investment contract,” the SEC claims. “The investment 1 Global offered and sold to investors was a security.”

Parallel to the SEC case, bankruptcy proceedings are continuing to move forward as well.

There has been no word on criminal charges since 1st Global revealed it was being investigated by the US attorney’s office in July.

The SEC’s opposition to 1st Global’s motion to dismiss can be downloaded here.

Last modified: April 20, 2019

Category: Legal Briefs

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