Moreover, Shustek allegedly repeatedly misled investors by causing VRTA and VRTB to make false and misleading statements that concealed his self-dealing.
Shustek’s conduct violated the antifraud provisions of the Securities Act, Exchange Act, and Advisers Act, according to the Commission.
In a statement, SEC San Francisco Regional Office Director Erin Schneider said, “REIT executives have a responsibility to be forthright with investors about how their money is being spent. As we allege in our complaint, Shustek deceived the REITs’ boards of directors and shareholders to hide his repeated misuse of their assets to benefit himself.”
Michael Shustek is a recidivist or a repeat offender. In 2006, the SEC ordered Shustek and his firms Vestin Mortgage and Vestin Capital to cease and desist from committing or causing any violations and any future violations of securities laws. The Commission also suspended him from association with any broker or dealer for six months and to pay a penalty of $100,000.
