SEC Charges Pre-Settlement Funding Company and Founder with Improperly Selling Unregistered Securities to Non-Accredited Investors
April 19, 2022
File No. 3-20825
April 19, 2022 - The Securities and Exchange Commission today announced settled charges against The Legal Funding Group of Georgia, LLC, a Savannah, Georgia-based pre-settlement funding business, and its principal and founder, Benjamin S. Eichholz, for selling unregistered securities to investors who were ineligible to participate in the offering.
According to the SEC's order, between 2017 and 2021, Legal Funding and Eichholz raised approximately $2.35 million through the continuous offer and sale of "investment contracts" to approximately 20 investors, some of whom were not accredited investors. The order also finds that Legal Funding and Eichholz's offer and sale of these investment contracts did not qualify for an exemption from registration.
The SEC's order charges Legal Funding and Eichholz with violating the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. Without admitting or denying the SEC's findings, Legal Funding and Eichholz consented to a cease-and-desist order, and Legal Funding agreed to pay a $37,500 civil penalty, while Eichholz agreed to pay a civil penalty of $12,500.
The SEC's investigation was conducted by Grant Mogan and supervised by Thomas B. Bosch of the SEC's Atlanta Regional Office.