A registered rep in Plano, Texas, is linked to a real estate deal that state regulators in June hit with a cease and desist order and then two months later moved so investors could get their money back.
Stephen D. Patterson, who has been registered with J. Alden Associates Inc. since 2022, is named as a sales compensation recipient on documents filed with the Securities and Exchange Commission for a private securities offering sponsored by Lasater Capital, a purported private equity and real estate investment firm that offers real estate fund investments to clients, including residents of Texas.
The fund facing recent scrutiny from the Texas State Securities Board is the Lasater RE Fund 14, according to a statement from the regulator in June and a cease and desist order. According to what’s known as a Regulation D filing dated May 5, the total amount of securities sold of Lasater RE Fund 14 was $5.6 million, with commissions totaling $750,000, a rate of 13.4%.
Commissions for such high-risk private placements, which are typically sold only to wealthy investors, usually range from 7% of the total dollar amount sold to 10%.
Lee Calfo, CEO of J. Alden Associates, did not return calls Monday and Tuesday to comment. An attorney for Lasater Capital did not respond to a request for comment.
According to FINRA, J. Alden has been up and running since 1996. The firm is headquartered in Wayne, Penn., and has approximately 100 registered representatives in eight branch offices.
Patterson is not named in the Texas cease and desist order.
Texas securities regulators initially accused Lasater RE Fund in June of fraud but later dropped those claims in August after the fund made clear it would repay investors.
According to the June order, Lasater Capital was offering investments in Lasater RE Fund 14, which was marketed as an opportunity to invest in diversified multi-family and real estate-related assets.
Lasater Capital represented that investors could receive quarterly cash flow distributions, equity appreciation, and targeted returns of up to 20%. The fund reportedly sought to raise approximately $10 million and had already raised approximately $5.6 million from more than 50 investors.
The enforcement action alleged that the respondents controlled KeyCity Capital and failed to disclose material information concerning the financial condition and operational history of affiliated entities and prior real estate investment offerings.
According to the order, numerous affiliated entities experienced significant financial distress, including loan defaults exceeding $100 million, foreclosures, Chapter 11 bankruptcy proceedings, receivership actions, investor litigation, and multimillion-dollar judgments.
After negotiations with the state, Lasater agreed in August to pay refunds to investors.
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