Information and Alerts

Government Actions 1

Securities and Exchange Commission v. Eric A. Alexander, No. 22-cv-60700 S.D. Fla.,

As of May 4, 2022:

A Consent Final Judgment and Permanent Injunction was issued in regards to Eric A Alexander which states:

IT IS ORDERED AND ADJUDGED that Alexander is permanently restrained and enjoined from violating Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a)

IT IS FURTHER ORDERED AND ADJUDGED that Alexander is permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder, 17C.F.R. § 240.10b-

IT IS FURTHER ORDERED AND ADJUDGED that Alexander is liable to the Commission for a civil penalty of $100,000 pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section 21(d)(3) of the Exchange Act, 15 U.S.C. § 78u(d)

IT IS FURTHER ORDERED AND ADJUDGED that, pursuant to Section 21(d)(2) of the Exchange Act, 15 U.S.C. § 78u(d)(2), and Section 20(e) of the Securities Act, 15 U.S.C. § 77t(e), Alexander is prohibited, for five years following the date of entry of this Final Judgment, from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. § 78l, or that is required to file reports pursuant to Section 15(d) of the Exchange Act, 15 U.S.C. § 78o(d)

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As of April 11, 2022:

The Securities and Exchange Commission announced charges against an additional two individuals in connection with its investigation related to 1 Global Capital, LLC, a now bankrupt South Florida merchant cash advance company. The SEC previously charged 1 Global, its owner, and others with operating an allegedly fraudulent scheme that raised $322 million from at least 3,600 investors. The SEC also previously charged ten of 1 Global's top sales agents, for various registration violations.

In separate complaints, the SEC alleges that 1 Global's former chief financial officer, Eric A. Alexander, and its former director of business development, Scott A. Merkelson, participated in 1 Global's fraud on retail investors. According to the complaints, Alexander, a certified public accountant, and Merkelson, a former licensed securities professional, manipulated 1 Global's management fee to artificially raise or lower investors' monthly rates of return and signed monthly investor account statements that they knew contained these false rates of return. Additionally, according to the complaints, the monthly account statements Alexander and Merkelson signed falsely represented that an independent auditor had endorsed 1 Global's method of calculating investor returns.

The SEC's complaints, which were filed in federal district court in Miami, charge Alexander and Merkelson with violations of the antifraud provisions of the federal securities laws. Without admitting or denying the SEC's allegations, Alexander and Merkelson each consented to a permanent injunction, a $100,000 civil penalty and an officer and director bar. The settlements are subject to Court approval.

LINK: https://www.sec.gov/litigation/litreleases/2022/lr25357.htm?utm_medium=email&utm_source=govdelivery

Government Actions 2

Securities and Exchange Commission v. Scott A. Merkelson, No. 22-cv-60702 S.D. Fla.,

UPDATE As of April 11, 2022:

A Final Judgment on Consent has been issued in this case which ordered the following:

IT IS ORDERED AND ADJUDGED that Merkelson is permanently restrained and  enjoined from violating Section 17(a) of the Securities Act [15 U.S.C. §77q(a)] in the offer or sale of any security by the use of any means or instruments of transportation or communication in interstate commerce or by use of the mails, directly or indirectly:
(a) to employ any device, scheme, or artifice to defraud;
(b) to obtain money or property by means of any untrue statement of material fact or any omission of a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or
(c) to engage in any transaction, practice, or course of business which operates or would operate as a fraud or deceit upon the purchaser, with respect to:
(1) any investment strategy or investment in securities,
(2) the prospects for success of any product or company,
(3) the use of investor funds,
(4) compensation to any person, or
(5) whether any investment product is a security or required to be registered under the securities laws

IT IS FURTHER ORDERED AND ADJUDGED that Merkelson is permanently restrained and enjoined from violating, directly or indirectly, Section 10(b) of the Exchange Act [15 U.S.C. §78j(b)] and Rule 10b-5 promulgated thereunder (17C.F.R. § 240.10b-5), by using any means or instrumentality of interstate commerce, or of the mails, or of any facility of any national securities exchange, in connection with the purchase or sale of any security:
(a) to employ any device, scheme, or artifice to defraud;
(b) to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or
(c) to engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, with respect to:
(1) any investment strategy or investment in securities,
(2) the prospects for success of any product or company,
(3) the use of investor funds,
(4) compensation to any person, or
(5) whether any investment product is a security or required to be registered under the securities laws

IT IS FURTHER ORDERED AND ADJUDGED that Merkelson is liable to the Commission for a civil penalty of $100,000 pursuant to Section 20(d) of the Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act[15 U.S.C. § 78u(d)(3)].

IT IS FURTHER ORDERED AND ADJUDGED that, pursuant to Section 21(d)(2) of the Exchange Act, 15 U.S.C. § 78u(d)(2), and Section 20(e) of the Securities Act, 15 U.S.C. § 77t(e), Merkelson is prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act, 15 U.S.C. § 78l, or that is required to file reports pursuant to Section 15(d) of the Exchange Act, 15 U.S.C. § 78o(d).

IT IS FURTHER ORDERED AND ADJUDGED that, solely for purposes of exceptions to discharge set forth in Section 523 of the Bankruptcy Code, 11 U.S.C. § 523, the allegations in the Complaint are true and admitted by Merkelson, and further, any debt for civil penalty or other amounts due by Merkelson under this Final Judgment or any other judgment, order, consent order, decree, orsettlement agreement entered in connection with this proceeding, is a debt for the violation by Merkelson of the federal securities laws or any regulation or order issued under such laws, as set forth in Section 523(a)(19) of the Bankruptcy Code, 11 U.S.C. § 523(a)(19).

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As of April 11, 2022:

The Securities and Exchange Commission announced charges against an additional two individuals in connection with its investigation related to 1 Global Capital, LLC, a now bankrupt South Florida merchant cash advance company. The SEC previously charged 1 Global, its owner, and others with operating an allegedly fraudulent scheme that raised $322 million from at least 3,600 investors. The SEC also previously charged ten of 1 Global's top sales agents, for various registration violations.

In separate complaints, the SEC alleges that 1 Global's former chief financial officer, Eric A. Alexander, and its former director of business development, Scott A. Merkelson, participated in 1 Global's fraud on retail investors. According to the complaints, Alexander, a certified public accountant, and Merkelson, a former licensed securities professional, manipulated 1 Global's management fee to artificially raise or lower investors' monthly rates of return and signed monthly investor account statements that they knew contained these false rates of return. Additionally, according to the complaints, the monthly account statements Alexander and Merkelson signed falsely represented that an independent auditor had endorsed 1 Global's method of calculating investor returns.

The SEC's complaints, which were filed in federal district court in Miami, charge Alexander and Merkelson with violations of the antifraud provisions of the federal securities laws. Without admitting or denying the SEC's allegations, Alexander and Merkelson each consented to a permanent injunction, a $100,000 civil penalty and an officer and director bar. The settlements are subject to Court approval.

LINK: https://www.sec.gov/litigation/litreleases/2022/lr25357.htm?utm_medium=email&utm_source=govdelivery

Government Actions 3

USA v. Ruderman. Case number 1:23-cr-20303 SD Fla

UPDATE As of October 13, 2023

Carl R. Ruderman, 82, former chairman of 1 Global Capital LLC (“1 Global”) pled guilty to a $250 million securities fraud scheme. Four of Ruderman’s co-conspirators have already pleaded guilty for their role in this fraud, including two lawyers who provided him with false legal cover to skirt federal securities laws.

Ruderman pled guilty to conspiracy to commit securities fraud, in violation of Title 18, United States Code, Section 371. In his plea agreement, Ruderman agreed to a sentence of 5 years, the statutory maximum, and to a forfeiture money judgment of over $250 million.  

1 Global was a commercial lending business based in Hallandale Beach, Florida, that made the equivalent of “pay day” loans to small businesses at high interest rates, termed merchant cash advance loans (“MCAs”). Ruderman was the chairman of 1 Global.

Ruderman admitted that he and others made false and misleading representations to investors and potential investors as to the profitability of 1 Global’s business in marketing materials and periodic account statements. According to plea documents, investors were falsely told that 1 Global had audited financials by a public accounting firm, that the investor’s money would be spent on the MCAs, and that they could expect double-digit returns on their investments, among other things.

Ruderman admitted that he spent 1 Global’s investor’s money on credit card payments, vacation travel, insurance payments for his art collection and valuable jewelry, drivers, nannies, housekeepers, mortgage payments for his house, tuition, and payments for a luxury car. Ruderman also admitted that he diverted 1 Global investor money to businesses benefitting him and his family, without the investors’ knowledge.

1 Global filed for bankruptcy on July 27, 2018. As of that time, according to documents from related cases, 1 Global had more than 3,400 investors and had raised more than $250 million during the scheme. The bankruptcy case, In re: 1 Global Capital LLC, et al., No. 18-19121-RBR (S.D. Fla.), remains pending.

The SEC previously filed civil fraud actions related to the 1 Global Fraud, captioned, SEC v. 1 Global Capital LLC and Carl C. Ruderman, Case No. 18-61991-CV-BB (S.D. Fla.); SEC v. Alan G. Heide, Case No. 19-62047-CV-FAM (S.D. Fla.); SEC v. Jan Douglas Atlas, 19-62303-CV-WPD (S.D. Fla.); SEC v. Steven A. Schwartz, Case No. 20-80008-CV-DMM (S.D. Fla.); and SEC v. Andrew Dale Ledbetter, Esq., Case No. 20-61972-CV- (S.D. Fla.).

Information about the related cases can be found here: https://www.justice.gov/usao-sdfl/1Global-Capital

Related court documents and information may be found on the website of the District Court for the Southern District of Florida at www.flsd.uscourts.gov or at http://pacer.flsd.uscourts.gov under case number 23-CR-20303-CMA.

LINK:https://www.justice.gov/usao-sdfl/pr/former-chairman-1-global-pleads-guilty-running-250-million-securities-fraud-scheme

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As of July 26, 2023

Former Chairman of 1 Global Indicted for Running $250 Million Securities Fraud Scheme

Carl R. Ruderman, 81, former chairman of 1 Global Capital LLC (“1 Global”) was indicted with orchestrating a sprawling fraud scheme that affected more than 3,400 investors in 42 different states. Four of Ruderman’s co-conspirators have already pleaded guilty for their role in this fraud.

Alan G. Heide, 65, of Lake Worth, Florida, the former 1 Global chief financial officer, pleaded to a single count information, charging him with one count of conspiracy to commit securities fraud (case no. 19-cr-60231), and was sentenced to 60 months in prison by U.S. District Judge Roy K. Altman. Judge Altman also ordered Heide to pay over $57 million in restitution to the victims of the scheme.

Andrew Dale Ledbetter, 81, of Fort Lauderdale, Florida, pleaded guilty to conspiracy to commit wire fraud and securities fraud (case no. 20-cr-60103), and was sentenced by Judge Altman to 60 months in prison. Judge Altman also ordered Ledbetter to pay over $148 million to the victims of the scheme.

Steven Allen Schwartz, 78, of Delray Beach, Florida, pleaded guilty to conspiracy to commit wire fraud and securities fraud (case no. 20-cr-60003), and was sentenced to 24 months in prison by Judge Altman. Judge Altman also ordered Schwartz to pay over $36 million in restitution to the victims of the scheme.

Jan Douglas Atlas, 78, of Fort Lauderdale, Florida, pleaded guilty to conspiracy to commit wire fraud and securities fraud (case no. 19-cr-60258), and was sentenced to eight months in prison by Judge Altman. Judge Altman also ordered Atlas to pay over $29 million in restitution to the victims of the scheme.

According to the indictment, 1 Global was a commercial lending business based in Hallandale Beach, Florida, that made the equivalent of “pay day” loans to small businesses at high interest rates, termed merchant cash advance loans (“MCAs”). Ruderman was the chairman of 1 Global and Heide was the chief financial officer. Schwartz was a director and consultant at 1 Global, and also held out as a chief operating officer in the company’s marketing materials. Ledbetter was an attorney licensed in the State of Florida who had an of counsel position at Law Firm #1 and acted in a fundraising capacity at 1 Global beginning around 2015. Atlas was a partner at Law Firm #1 and acted as outside counsel for 1 Global.

The indictment alleges that to attract investments, Ruderman and others, made false and misleading representations to investors and potential investors as to the profitability of 1 Global’s business in marketing materials and periodic account statements. Allegedly, investors were falsely told that 1 Global had audited financials by a public accounting firm, that the investor’s money would be spent on the MCAs, and that they could expect double-digit returns on their investments, among other things.

It is alleged that Ruderman spent 1 Global’s investor’s money on credit card payments, vacation travel, insurance payments for his art collection and valuable jewelry, drivers, nannies, housekeepers, mortgage payments for his house, tuition, and payments for a luxury car driven by his wife. Ruderman also diverted 1 Global investor money to businesses benefitting him and his family, without the investors’ knowledge.

According to the allegations, substantial questions arose during the operation of the business as to whether 1 Global was offering or selling a security and whether the investment offering was required to be registered with the U.S. Securities and Exchange Commission. Allegedly, these questions were raised by investors, investment advisors, and regulators. As alleged in the charging documents, Ruderman knew that if 1 Global’s investment offering were determined to be a security, it would undermine the ability of 1 Global to raise funds from retail investors and to continue to operate without substantial additional expenses and reporting requirements. Such a classification would undermine the profits and fees that Ledbetter and other principals at 1 Global would be able to obtain from 1 Global’s operations.

As alleged in the indictment, at the request of Ruderman, Atlas authored two opinion letters in 2016 containing false information that Atlas allegedly knew would be used by 1 Global to operate the business unlawfully. The opinion letters falsely described the duration of the investment, among other things, omitting the automatic renewal aspect and that the investment was being targeted toward retail, non-sophisticated investors (such as IRA account holders). Allegedly, Ruderman and others at 1 Global used and relied on Atlas’s opinion letters to continue to raise money illegally, in numerous pitches and communications to investment advisors and investors.

1 Global filed for bankruptcy on July 27, 2018. As of that time, according to documents from related cases, 1 Global had more than 3,400 investors and had raised more than $250 million during the scheme. The bankruptcy case, In re: 1 Global Capital LLC, et al., No. 18-19121-RBR (S.D. Fla.), remains pending.

Information about the related cases can be found here: https://www.justice.gov/usao-sdfl/1Global-Capital.

LINK: https://www.justice.gov/usao-sdfl/pr/former-chairman-1-global-indicted-running-250-million-securities-fraud-scheme