SEC Obtains Final Judgments Against Founders of Real Estate Crowdfunding Portal
Litigation Release No. 24536 / July 17, 2019
United States Securities and Exchange Commission v. William C. Skelley and Sohin S. Shah, Defendants, Civil Action No. 18-CV-8803 (LGS) (S.D.N.Y., filed September 26, 2018)
The Securities and Exchange Commission obtained final judgments on July 8, 2019 and July 16, 2019, respectively, against William C. Skelley and Sohin S. Shah, the co-founders of a real estate crowdfunding portal who were charged last year by the agency.
The SEC's complaint, filed on September 26, 2018 in the Southern District of New York, alleges that New York resident Skelley and New Jersey resident Shah, co-founders and senior executives of iFunding LLC, misappropriated more than $1 million of investor funds for their personal use. The complaint also alleges that Skelley made materially false or misleading statements to investors orally and in private placement memoranda about the use of investor funds, the amount of funds that had been raised on iFunding's portal, and the number of real estate projects that iFunding had financed.
The final judgments against Skelley and Shah permanently enjoin them from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The default judgment against Skelley ordered future proceedings on disgorgement, prejudgment interest, and a civil penalty. The judgment against Shah orders him to pay disgorgement plus prejudgment interest of $73,794 and a civil penalty of $75,000. Shah consented to the entry of the final judgment without admitting or denying the allegations in the complaint.
The SEC's investigation was conducted by Ruta G. Dudenas and Luz M. Aguilar of the Chicago Regional Office, and was supervised by Amy S. Cotter. Doressia L. Hutton and John E. Birkenheier lead the litigation.