Securities Lawyers Blog
According to BrokerCheck records kept by The Financial Industry Regulatory Authority (FINRA) advisor Jennifer Ling (Ling), formerly associated with Axiom Capital Management, Inc. (Axiom Capital) in New York, New York has been subject to three customer complaints concerning her sale of Aequitas related promissory notes.
The Securities and Exchange Commission (SEC) filed a complaint alleging that Oregon-based investment firm Aequitas Management, LLC (Aequitas Management) and its subsidiaries operated a Ponzi-like scheme that defrauded its 1,500 customers of approximately $350 million. The SEC’s complaint also claimed that Aequitas’ CEO Robert Jesenik (Jesenik), executive vice president Brian Oliver (Oliver) and chief operating officer N. Scott Gillis (Gillis) were aware as early as 2014 that constraints in the company’s cash flow would make it difficult to meet existing obligations but continued to raise money anyway based on false premises in order to prop up the company.
According to the complaint, when the executives learned of large discrepancies between their assets and obligations they declined to cut expenses and raised hundreds of millions of dollars from new investors. The SEC found that since 2014, Aequitas defrauded investors into thinking that they were investing in a portfolio of trade receivables in healthcare, education, transportation, or consumer credit while in reality the vast majority of investor funds to repay prior investors and to pay the operating expenses of the Aequitas enterprise. In addition, the company used funds to support the lavish salaries and lifestyles of the owners.
At the heart of the company’s troubles is its outsized investment in Corinthian College, a Canadian for-profit college that was effectively shuttered after the province of Ontario suspended its operating license in early 2015. Corinthian College then declared Chapter 11 bankruptcy in May 2015, crushing Aequitas finances since 75 percent of its trade-receivables portfolio was tied to the college.
The Aequitas Funds include:
Aequitas WRFF I
Aequitas Private Client Fund
Aequitas Income Protection Fund
Aequitas ETC Founders Fund
Aequitas Income Opportunity Fund II
Aequitas Enhanced Income Fund
Aequitas Commodities Fund
Aequitas Capital Opportunities Fund
Aequitas Secured Subordinated Promissory Notes
Ling entered the securities industry in 2000. From May 2015 until July 2017 Ling was associated with Axiom Capital out of the firm’s New York, New York office location.
Investors who have suffered losses may be able recover their losses through securities arbitration. The attorneys at Gana Weinstein LLP are experienced in representing investors in cases of investment fraud and brokerage firms failure to supervise their representatives. Our consultations are free of charge and the firm is only compensated if you recover.