The team was retained by the Securities and Exchange Commission (SEC) in a litigation against a national merchant cash advance company. The company and its former CEO were charged with securities fraud and defrauded thousands of retail investors by promising unobtainable returns to investors, diverting assets for personal use and for other businesses, and using investor funds to pay early investors (ponzi-scheme).
The team analyzed the company’s bank statements and accounting records to reconstruct the company’s sources and uses of cash, and perform an asset tracing of funds paid from the company to the bank accounts of the company’s owners, the owners’ family members, and other companies owned or controlled by the owners and their families. The asset tracing analysis and reconstruction of the company’s accounting records were used by the SEC to successfully demonstrate the company was misappropriating investor funds and making misrepresentations to investors. Our analysis and findings also led to a successful outcome for the SEC and Department of Justice.
Note: This work was performed prior to Stout.