To complicate matters, 1 Global allegedly gave investors bogus account statements. Further, 1 Global falsely told the investors that the company had an independent auditor, and had default rates on the secured loans.
According to the SEC complaint, and in stark contrast to its messaging to investors, 1 Global marketed itself to business borrowers as a low-hassle way to access cash quickly. In reality, 1 Global made numerous substantial unsecured loans, while also suffering from problems with collections. Ruderman has since declared bankruptcy and resigned from the company.
“We allege that 1 Global’s business model was a sham because instead of using investor funds as promised, 1 Global and Ruderman diverted significant funds, including to Ruderman himself for his personal benefit,” said Eric I. Bustillo, director of the SEC’s Miami regional office. “The SEC’s investigation effectively stopped 1 Global’s offering and prevented further harm to investors and retirement funds.”
The SEC’s complaint charges 1 Global and Ruderman with violations of the antifraud, securities registration and broker-dealer registration provisions of the federal securities laws. The SEC seeks disgorgement of allegedly ill-gotten gains, prejudgment interest from the defendants and relief defendants, and financial penalties against the defendants.
