SEC Cracks Down on 1 Global Ponzi Scheme
A federal court has ordered 1 Global broker Roger E. Dobrovodsky, 65, to surrender his commission earnings of $317,690 over to the Securities Exchange Commission (SEC) for the sale of unregistered securities sales along with civil penalties and prejudgement interest totaling $80,000.
1 Global Accused of Illegal Merchant Cash Advances
U.S. District Judge Raag Singhal sided with the SEC’s request on citing the violations against the Securities Act of 1933 and the Securities Exchange Act of 1934. According to the SEC, Dobrovodsky, 65, had raised nearly $5.2 million in his part during the purported illicit commercial lending scheme at the 1 Global company.
The federal government has charged 1 Global with engaging in the illegal issuance of short term small and mid-size business loans called merchant cash advances from March 2017 to July 2018 that were instead used to pay off early investors in the company. It is estimated that the company was able to rack in $322 million from thousands of investors.
Former 1 Global CEO Faces a $287M Legal Suit
The Florida based company, 1 Global, was founded in 2013 and had nearly 3600 investors across 42 different states at the time of filing bankruptcy in 2018. Dobrovodsky isn’t the only person to be charged in relation to the scandal either. Associates Robert Todd Seth, 57, and Matthew L. Walker, 40, will also face civil penalties for their involvement in the Ponzi scheme.
Outside counsel attorney Andrew Ledbetter, 78, who pocketed nearly $3 million from the ordeal was hit with criminal charges and a lawsuit from the SEC. Former CEO Carl Ruderman, who pocketed nearly $32 million in ill-gotten gains has already faced a $287 million legal suit along with a $15 million civil penalty from the SEC.
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