U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23982 / November 9, 2017
Securities and Exchange Commission v. Paul Z. Singer and Singer Financial Corp. No. 17-cv-5053 (E.D.Pa. filed November 9, 2017)
Philadelphia Mortgage Lender Charged with Illegal Securities Offering
The Securities and Exchange Commission today charged Singer Financial Corp. ("SFC"), a Philadelphia, Pennsylvania-based "hard money" lender, and Paul Z. Singer, SFC's sole officer, director, and shareholder, with operating an illegal and unregistered offering of securities.
The SEC's complaint alleges that Singer and SFC raised approximately $4.5 million from at least 70 investors between October 2012 and July 2015 through an illegal and unregistered offering of unsecured promissory notes. According to the SEC's complaint, Singer and SFC conducted the unregistered offering without a registration statement in effect and without qualifying for an applicable exemption from registration. The SEC's complaint further alleges that Singer and SFC initially sought an exemption from registration for an offering of investment certificates, which were nearly identical to the promissory notes. After the SEC staff questioned, among other things, the size and scope of significant non-interest bearing related party loans SFC made to Singer and other companies he owned, Singer abandoned his efforts to obtain an exemption and, instead, embarked on the illegal, unregistered offering of promissory notes. According to the SEC's complaint, by failing to register the offering of promissory notes with the SEC, or otherwise qualify the offering for an exemption from registration, Singer and SFC deprived its investors of critical information regarding the risks of investing in SFC and in unsecured promissory notes.
The SEC's complaint, filed in federal court in Philadelphia, Pennsylvania, charges Paul Z. Singer and SFC with violating Section 5(a) and (c) of the Securities Act of 1933. The SEC seeks permanent injunctions, which includes enjoining Singer from participating in future unregistered offerings, disgorgement, prejudgment interest, and penalties.
The SEC's investigation has been conducted by Kelly L. Gibson, Brendan P. McGlynn, Christine R. O'Neil, and Brian R. Higgins in the Philadelphia Regional Office. The SEC's litigation will be led by Karen Klotz.