A federal judge in Fort Lauderdale, Florida, last week told the Securities and Exchange Commission and two Philadelphia-area owners of Par Funding to reach a settlement to give some relief to 1,200 investors the SEC claims were sold fraudulent securities to finance Par’s high-fee loans to small businesses, according to the Philadelphia Inquirer.
Last Wednesday, the judge, Rodolfo Ruiz, gave the SEC 10 days to negotiate a settlement with Par founders Joseph LaForte and his wife, Lisa McElhone, according to the report. The SEC had called on the court to order the couple to pay $337 million in a petition filed in May. The couple’s lawyers said they should pay a maximum of $56 million.
It's the latest development in the wide-ranging Par Funding matter, an allegedly fraudulent scheme that raised nearly half a billion dollars from an estimated 1,200 investors nationwide. The SEC charged Par Funding with fraud in July 2020.
If the two sides don’t come up with a plan, the judge said, according to the Inquirer, he's likely to make an award that would disappoint both.
The SEC sued Par’s owners and several outside salespeople for failing to register the investments as securities and failing to warn investors of risks, including LaForte’s past felony convictions and the difficulties Par borrowers faced repaying their loans at the company’s high interest rates, according to the Inquirer.
Last year the Par owners agreed not to dispute the SEC’s allegations; since then, the two sides have been arguing over how much they should have to pay, according to the report. The SEC is pursuing its civil lawsuit in Florida, where Par moved its headquarters in 2017, though the firm kept offices in Philadelphia.
Others have already reached a settlement with the federal government. Earlier this year, Dean Vagnozzi, a Philadelphia financial adviser, settled with the SEC over the Par Funding matter and agreed to pay $5 million, including $4.5 million in disgorgement, $161,000 in interest and a $400,000 civil penalty.
From outstanding individuals to innovative organizations, find out who made the final shortlist for top honors at the IN awards, now in its second year.
Cresset's Susie Cranston is expecting an economic recession, but says her $65 billion RIA sees "great opportunity" to keep investing in a down market.
“There’s a big pull to alternative investments right now because of volatility of the stock market,” Kevin Gannon, CEO of Robert A. Stanger & Co., said.
Sellers shift focus: It's not about succession anymore.
Platform being adopted by independent-minded advisors who see insurance as a core pillar of their business.
RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.
As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.
