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1st Global Capital Investors Solicited by Pinnacle Plus Wealth Management May Have Legal Claims

1st-Global-Capital-1As we have discussed in several recent blog posts, on July 27, 2018, 1 Global Capital (a/k/a 1st Global Capital) (hereinafter, “1GC”) filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court for the Southern District of Florida.  Formed about 5 years ago, 1GC was purportedly in the business of making short term merchant cash advances to a range of small businesses.  In exchange for investor money, 1GC issued so-called “memorandums of indebtedness,” sometimes referred to as First Global Capital Notes (“Notes”), to numerous retail investors through a nationwide network of advisors and sales agents.  Investors were promised a high-return, low-risk investment in supposedly safe, short-term deals.

Prior to 1GC’s bankruptcy filing, the SEC had “opened an investigation into the company’s activities related to alleged possible securities laws violations, including the alleged offer and sale of unregistered securities, the alleged sale of securities by unregistered brokers, and by the alleged commission of fraud in connection with the offer, purchase and sale of securities.”  In the weeks following 1GC’s $283 million Chapter 11 filing, it has become apparent that numerous investors nationwide have been negatively impacted.  As alleged by the SEC, 1GC “used a network of barred brokers, registered and unregistered advisers, and other sales agents – to whom they paid millions in commissions – to offer and sell unregistered securities to investors in no fewer than 25 states.”

Publicly available information indicates that numerous investors in the greater Kansas City, KS area have sustained losses in connection with investing in 1GC Notes.  In particular, publicly available information suggests that Overland Park-based investment group Pinnacle Plus Wealth Management (a/k/a Pinnacle Financial) (“Pinnacle”), through its principal and Pinnacle employees / agents, may have recommended investments in 1GC Notes to retail investors.  In fact, court records indicate that approximately 160 1GC accounts involved Kansas City area addresses, and moreover, it appears many investors committed their retirement funds to 1GC investments through their retirement accounts.

Pinnacle is structured as a Registered Investment Advisor (“RIA”), and according to publicly available information through the SEC, is licensed to sell securities in Kansas, Missouri, Colorado, and Louisiana.  Pinnacle’s CEO and founder, Mr. Matthew Lynn Walker, CRD. No. 153896, also serves as Pinnacle’s Chief Compliance Officer.  Upon information and belief, a number of Kansas City area investors may have been steered into 1GC Notes upon the recommendation of Mr. Walker and certain of his employees at Pinnacle.

Investors who invested in any 1st Global Capital “memorandums of indebtedness” or Notes, or direct merchant cash advances upon the recommendation of  a financial advisor, may have viable legal claims if the brokerage firm or Registered Investment Advisor (“RIA”) failed to perform adequate due diligence before recommending the investment.

Investors who wish to discuss a possible claim concerning 1st Global investments may contact Law Office of Christopher J. Gray, P.C. at (866) 966-9598 or for a no-cost, confidential consultation.  Attorneys at the firm are admitted in New York and Wisconsin and various federal courts around the country, and handle cases nationwide (in cooperation with attorneys located in those states if required by applicable rules).

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