SEC charges former cash advance firm CEO with defrauding retail investors


ANI Development LLC charged with defrauding approximately 50 retail investors

The Securities and Exchange Commission (SEC) has announced charges against 1 Global Capital LLC and its former chief executive officer for allegedly defrauding at least 3,400 retail investors, more than one-third of whom invested their retirement funds. The Florida-based cash advance company and former CEO Carl Ruderman allegedly fraudulently raised more than $287 million since 2014 in unregistered securities sold through a network that included barred brokers.

On August 23, the Honorable Judge Beth Bloom of U.S. District Court for the Southern District of Florida granted the SEC’s request for a temporary asset freeze against Ruderman and other Ruderman companies charged by the SEC as relief defendants. The court also granted the SEC’s request to appoint a receiver over certain of the relief defendants – Bright Smile Financing LLC, BRR Block Inc., Digi South LLC, Ganador Enterprises LLC, Media Pay LLC, and Pay Now Direct LLC. The court scheduled a hearing for September 7 for Ruderman and the relief defendants to show cause, if any, why the asset freeze order should not continue for the pendency of the litigation or until otherwise ordered by the court.

According to the SEC’s complaint unsealed Tuesday, although investors were promised profits from 1 Global’s loans to small and mid-sized companies, a large portion of their money went to Ruderman’s lavish personal spending and to his consumer-loan companies, Bright Smile Financing and Ganador Enterprises, which had nothing to do with 1 Global’s cash advance business. Investors in 1 Global allegedly were given bogus account statements and were falsely told that it had an independent auditor, and that its secured loans, typically for small amounts, had low default rates. According to the complaint, in contrast to what it told investors, 1 Global marketed itself to business borrowers as a low-hassle way to access cash quickly, often made large, unsecured loans, and had significant problems with collections. 1 Global declared bankruptcy in July and Ruderman resigned from the company.

The misconduct that we’ve alleged occurred in this case directly impacted retail investors,” said Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement. “We filed this action on an emergency basis to protect those investors from further harm.

We allege that 1 Global’s business model was a sham because instead of using investor funds as promised, 1 Global and Ruderman diverted significant funds, including to Ruderman himself for his personal benefit,” added Eric I. Bustillo, Director of the SEC’s Miami Regional Office. “The SEC’s investigation effectively stopped 1 Global’s offering and prevented further harm to investors and retirement funds.

The SEC’s complaint charges 1 Global and Ruderman with violations of the antifraud, securities registration, and broker-dealer registration provisions of the federal securities laws. The SEC seeks disgorgement of allegedly ill-gotten gains and prejudgment interest from the defendants and relief defendants, and financial penalties against the defendants.

The SEC’s continuing investigation is being conducted by Gary Miller and Mark Dee in the Miami Regional Office and supervised by Elisha L. Frank and Fernando Torres. The SEC’s litigation is being led by Christopher Martin and Robert K. Levenson. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of Florida, the Federal Bureau of Investigation, the Florida Office of Financial Regulation, and the Colorado Division of Securities.

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SEC charges former cash advance firm CEO with defrauding retail investors

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