As a result of Angel Oak’s actions, the SEC alleges that Angel Oak and Negandhi willfully violated Sections 17(a)(2) and 17(a)(3) of the Securities Act. In addition, the SEC alleges that Angel Oak willfully violated and Negandhi caused Angel Oak’s violation of Section 206(2) of the Advisers Act.
These violations occurred when Angel Oak and Negandhi made false and misleading statements to potential investors regarding the firm’s character and quality of investments. By making these false and misleading statements, Angel Oak and Negandhi defrauded investors of millions of dollars. The SEC is seeking disgorgement of ill-gotten gains and civil penalties against Angel Oak and Negandhi.
Sources say that limited partner investors may be pulling their funds. As it stands as of the time of this writing, the firm’s reputation has been tarnished, and it will take a long time for them to regain the trust of the investment community. Only time will tell if Angel Oak will be able to weather this storm.
