U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23595 / July 15, 2016
Securities and Exchange Commission v. Zachary Brooke Roberts, No. 2:16-cv-01664 (D. Nev. July 14, 2016)
SEC Charges Company Principal with Securities Fraud in $1.7 Million Tribal Promissory Note Scheme
The Securities and Exchange Commission, on July 14, 2016, charged Zachary Brooke Roberts, principal of Nevada-based Encore Acceptance I, LLC (EAI), with fraud for failing to disclose an alleged kickback scheme to EAI investors.
The SEC complaint, filed in the United States District Court for the District of Nevada, alleges that, between December 2011 and July 2012, EAI raised approximately $1.72 million from 18 investors. While EAI informed investors that the proceeds of their investments would be used as capital in an online payday lending business owned by a subsidiary of a Native American tribe and managed by an entity affiliated with Roberts, investors were not informed by EAI or Roberts of an alleged kickback scheme involving payments to the tribe's members and officials, and that the potential discovery by the tribe of these actions would materially threaten the safety, security, and return of the investors' funds.
The SEC's complaint charges Roberts with 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 SEC seeks permanent injunctions, financial penalties, disgorgement of ill-gotten gains plus interest, and an officer-and-director bar.
The SEC's investigation was conducted by James J. Thibodeau and supervised by Richard R. Best of the SEC's Salt Lake Regional Office. The SEC's litigation will be led by Daniel J. Wadley of the Salt Lake Regional Office.
