The New Jersey Bureau of Securities took action against a company it said was responsible for a massive nationwide securities fraud, reports AdvisorNews.
The state regulators issued a summary cease-and-desist order to National Realty Investment Advisors, LLC (NRIA), based in Secaucus, New Jersey. The order said that from 2018 to 2022, the firm fraudulently sold at least $630 million in securities to at least 1,800 investors across the country, including 380 in New Jersey.
The securities were sold in the form of membership units in a real estate investment fund known as the NRIA Fund. Authorities said the company enticed would-be investors with a nationwide advertising campaign that promised the purchase of property at below-market value prices that would then be developed for sale at a large profit. Investors were promised guaranteed returns of 12% to 21%.
But the company orchestrated a scheme in order to conceal its poor performance, according to the Bureau of Securities. Rather than using actual cash flow, the bureau said the principals used the investors’ own money to fund annual distributions, “used straw purchasers to create nonexistent sales of certain residential units, and inflated the company’s performance by improperly recognizing certain revenues in violation of Generally Accepted Accounting Principles.”
The principals allegedly used millions of dollars raised from investors to make lavish payments to family members.
“The conduct outlined in today’s filing is egregious. It’s the very kind of conduct that undermines public confidence in our financial institutions and – ultimately – in investing,” said Acting Bureau of Securities Director Amy G. Kopleton. “These respondents offered investors a securities opportunity that sounded too good to be true, and it was.”
The Bureau said it found multiple violations of the anti-fraud provisions of the New Jersey Uniform Securities Law, including employing a scheme to defraud, making untrue statements of material fact, and omitting material facts in connection with the sale of NRIA Fund securities.
Lewitas Hyman routinely represents investors harmed when financial professionals and their firms engaged in misconduct that caused their clients investment losses. Our team includes lawyers who have worked for large financial institutions, including Morgan Stanley and UBS Financial Services, and regulatory bodies such as the SEC. If you think your financial professional or firm engaged in misconduct that caused you investment losses, contact Lewitas Hyman at (888) 655 6002 or through our online contact form for a no-cost evaluation of your matter.