SEC Charges Additional Unregistered Brokers Who Sold EquiAlt Securities to Retail Investors
Litigation Release No. 25116/ June 15, 2021
Securities and Exchange Commission v. Robert Joseph Armijo, et al., Case No. 3:21-cv-01107-TWR-RBB (S.D. Ca. filed June 14, 2021)
The Securities and Exchange Commission announced charges against a California-based individual, Robert Joseph Armijo, and a company he controlled and operated, for various registration violations in connection with their unlawful sales of securities of real estate funds to retail investors.
According to the SEC's complaint, between approximately February 2016 and February 2020, Armijo and his company, Joseph Financial, Inc., sold approximately $4.85 million of securities of funds managed by Florida-based EquiAlt LLC (the Funds) to more than 50 investors located in Arizona, California, Texas, and Oregon. Armijo, through Joseph Financial, received approximately $1.1 million in commissions from EquiAlt, despite neither Armijo nor Joseph Financial being registered as a broker-dealer. The SEC previously filed an enforcement action against EquiAlt and the Funds, EquiAlt's CEO Brian Davison, and EquiAlt's Managing Director Barry Rybicki, alleging that they were operating a Ponzi scheme which raised more than $170 million from approximately 1,100 investors in 35 states. The SEC also previously charged four of EquiAlt's top sales agents with various registration violations.
The SEC's complaint, which was filed in the United States District Court for the Southern District of California, charges Armijo and Joseph Financial with violating the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 and the broker-dealer registration provisions of Section 15(a)(1) of the Securities Exchange Act of 1934. The complaint seeks an order permanently enjoining Armijo and Joseph Financial from violating the charged provisions and requiring them to pay disgorgement of ill-gotten gains with prejudgment interest and civil penalties.
The SEC's continuing investigation is being conducted by Andre J. Zamorano, with assistance from Mark Dee, and supervised by Thierry Olivier Desmet and Glenn S. Gordon of the Miami Regional Office. The SEC's litigation is being led by Alise Johnson and supervised by Andrew O. Schiff. The SEC appreciates the assistance of the Arizona Corporation Commission.
The SEC encourages investors to check the backgrounds of people selling investments by using the SEC's Investor.gov to quickly confirm whether they are registered professionals.