SEC Charges Owner of 2 New Jersey-Based Firms in Stock Lending Scheme
The Securities and Exchange Commission has charged a New Jersey businessman with running a stock-lending scheme that defrauded public company officials and brought restricted stock to the market.
Ayuda Equity Funding, LLC and AmeriFund Capital Holdings, LLC, both located in North Butler, New Jersey, and owner Manuel M. Bello, agreed to settle the SEC’s complaint without admitting or denying the allegations. Bello and the firms jointly agreed to return $3.2 million of ill-gotten gains, plus interest. Bello, of Kinnelon, New Jersey, also agreed to pay a $500,000 penalty and be permanently barred from the securities industry.
According to the SEC’s complaint, Ayuda and AmeriFund reaped more than $3.2 million of illegal gains on loans to public company officers and directors who put up stock as collateral. Although some borrowers received written and oral assurances that the stock would not be sold as long as they did not default on their loan payments, Ayuda and AmeriFund sold the shares before or soon after making the loans, the SEC alleged.
The SEC also alleged that in at least 35 loan transactions, Ayuda and AmeriFund sold the borrowers’ restricted shares into the market without registering the transactions and the firms and Bello failed to register with the SEC as brokers or dealers. Without admitting or denying the SEC’s allegations, Ayuda, AmeriFund, and Bello consented to a final judgment permanently enjoining them from violating federal anti-fraud, broker-dealer registration, and securities registration laws. The settlement is subject to court approval.
The SEC’s investigation was conducted by Jacob D. Krawitz and supervised by Julie M. Riewe.