SEC v. Frederick D. Scott, Case No. CV 13-5113 (E.D.N.Y.). On September 13, 2013, the SEC announced fraud charges against Fredrick D. Scott whose firm ACI Capital Group was registered as an investment adviser. In a parallel criminal action, the U.S. Attorney’s Office for the Eastern District of New York today announced Scott has pleaded guilty to criminal charges for, among other things, making false statements to SEC examiners. The SEC alleges that Scott told investors that ACI would provide multi-million dollar loans to people seeking bank financing. As part of the deal, Scott told investors that they needed to advance ACI a portion of the loan amount and then they would get the remaining balance of the amount that Scott promised to pay. However, Scott never planned to return money to investors. According to the SEC, Scott also offered investors the opportunity to make a bridge loan to a third-party entity. Scott told investors that they would fund one portion of the loan, ACI would fund the remaining balance, and then investors would get a significant return on their investments. However, Scott simply took investors’ money. The SEC charged Scott with violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5, Section 207 of the Investment Advisers Act for filing a false Form ADV, and aiding and abetting ACI’s improper registration in violation of Section 203A of the Advisers Act.
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