Investor Lawyers Blog
The Securities and Exchange Commission (“SEC”) has filed a fraud lawsuit in federal court in Colorado against a group of companies known as “Financial Visions” and their principal, Daniel B. Rudden (“Rudden”), who allegedly bilked at least 150 investors in a $55 million alleged Ponzi scheme.
The SEC’s complaint charges that Rudden, operating under the name Financial Visions and through a group of companies, issued promissory notes to fund a line of business involving providing financing for funeral services and related expenses to consumers. The SEC alleges that Rudden/Financial Vision defrauded as many as 150 investors after promising them annual returns of 12% or more. Since 2010 or 2011, Rudden allegedly used new investor funds to pay interest and redemptions to existing investors and concealed the Financial Visions companies’ true financial performance and condition.
The SEC Complaint is accessible here.
The SEC charges that through July 2018, the Financial Visions Companies raised as much as $55 million from investors in multiple states through a promissory note offering. Financial Visions allegedly offered annual interest rates of 12% on promissory notes by earning profits through “life insurance assignments.” These “assignments” allegedly amounted to agreeing that a deceased person’s family members could pay for immediate funeral expenses at a later date by assigning life insurance proceeds to pay for these costs. According to the SEC, Financial Visions would then be reimbursed for the costs advanced, plus a 5% fee, upon receipt of the life insurance policy proceeds.
Rudden allegedly held this business out to investors as highly profitable, even though Financial Visions was not in fact earning sufficient income from its life insurance assignment business to pay interest and redemptions to its investors. Rudden allegedly began using new investor funds to pay interest and redemptions to existing investors- one mark of a Ponzi scheme- in 2010 or 2011.
Investors in non-conventional investments such as promissory notes and private placements should remain on alert for possible signs of fraud. In cases of Ponzi-type schemes, these may include:
- The promise of high returns with guarantees of little or no risk;
- Overly consistent returns with little or no volatility in the investment;
- Marketing through friends and family or through an affinity group such as a church, workplace or community organization;
- Overly complex or indecipherable investment strategies;
- Unregistered investments;
- Unlicensed seller or promoter;
- Suspicious investment documentation with errors;
- Failing to receive a scheduled payment;
- Encountering difficulty in exiting an investment and receiving cash.
The attorneys at Law Office of Christopher J. Gray, P.C. have significant experience in recovering funds on behalf of investors who have fallen victim to perpetrators of financial frauds, including Ponzi schemes. Investors may contact our office at (866) 966-9598 or newcases@investorlawyers.net for a no-cost, confidential consultation.