“Because Angel Oak and Negandhi did not disclose these actions, the performance data regularly disseminated to investors provided an inaccurate view of the actual delinquency rates on the mortgages in the securitization pool as well as the securitization’s compliance with the early repayment trigger,” the SEC claimed.
Chief of the complex financial instrument unit of the SEC’s Division of Enforcement, Osman Nawaz, said that misleading investors by failing to disclose the improper use of funds “while continuing to issue larger securitizations” violated multiple SEC laws.
“Firms must provide investors with full and accurate information regarding the performance of an investment, even after closing, to ensure the integrity of our markets,” Nawaz said.
The SEC found that Angel Oak and Negandhi violated antifraud U.S. securities regulations. And have agreed to the $1.75 million settlement from the company. And $75,000 from Negandhi. The company was also hit with a cease-and-desist order and a censure.
A statement from Angel Oak
“While not admitting or denying the findings, Angel Oak Capital Advisors accepts the ruling set forth by the SEC relating to a 2018 securitization involving fix-and-flip mortgage loans. The Angel Oak affiliate mortgage company has not originated these loans since 2019, and all senior noteholders in the securitization received full payment of principal and interest.”