According to the SEC, EquiAlt Davison, Rybicki misrepresented the real estate firm’s investment strategy to attract investors. They also made false claims about the financial conditions of the investments and the uses of investor funds.
Additionally, the defendants allegedly told investors that they would pool their funds and invest 90 percent to buy undervalued real estate, and then rent or flip the properties.
Furthermore, the defendants promised that they will pay investors around 8-10 percent annual interest, generated from the real estate investments.
However, EquiAlt, Davison, and Rybicki’s lied to investors. In fact, the defendants used a large portion of investor funds to support their lavish lifestyle. They only used less than 50 percent of the funds for real estate investments. EquiAlt used money from an investment fund to make Ponzi-like payments to investors in another fund.
SEC emergency action seeks to prevent further harm to investors
In a statement, SEC Miami Regional Office Director Eric Bustillo, commented, “We allege that Davison and Rybicki made ‘too good to be true’ promises about nearly every material aspect of EquiAlt’s business to induce retail investors, including elderly individuals, to invest with them. The SEC’s emergency action seeks to prevent further harm to these retail investors and locate and preserve as many assets as possible.”
