A New York City brokerage and two of its executives were found guilty by a federal jury on all counts of fraud and related charges Wednesday in a case centering on misleading investors on the value of high-yield securities.
A 2016 Securities and Exchange Commission complaint had charged Portfolio Advisors Alliance Inc. and its leaders with fraud and related charges in connection with a private placement offering with American Growth Funding II LLC.
The SEC had also alleged that American Growth Funding II LLC and its owner knowingly sent out false information and concealed other information to investors. American Growth Funding II falsely promised investors 12% annual returns and yearly audits, the SEC said.
However, the SEC obtained a final consent judgment against AGF II and Johnson in January in the U.S. District Court for the Southern District of New York.
Specifically, the agency had earlier charged American Growth Funding II, its owner, Ralph Johnson, PAA, and its leaders, Howard Allen III and Kerri Wasserman, with violating the fraud provisions of the Securities Act of 1933 and 1934.