The defendants continued to promote the private fund as a primarily liquid investment even if its investment strategy has been changed.
Franzone and FFM made the misrepresentations in FF Fund’s private placement memorandum (PPM) from December 2014 to June 2018.
During the relevant period, the defendants allegedly raised more than $38 million from approximately 90 investors.
Franzone and his firm allegedly violated securities laws
Furthermore, the SEC alleged that Franzone misused and misappropriated fund assets for his personal interests. He allegedly purchased a garage to store his private race car collection and pledged fund assets to secure loans for personal benefits.
On September 24, 2019, FF Fund filed for Chapter 11 bankruptcy in the Southern District of Florida. The private fund had no investments in liquid securities. It had only investments in four hedge funds that were liquidated for a total of $175,000, according to the SEC based on information from the Chief Restructuring Officer appointed in the bankruptcy.
