SEC Charges Former Executives of Florida Cash Advance Company with Defrauding Retail Investors
Litigation Release No. 25357 / April 11, 2022
Securities and Exchange Commission v. Eric A. Alexander, No. 22-cv-60700 (S.D. Fla., filed April 11, 2022)
Securities and Exchange Commission v. Scott A. Merkelson, No. 22-cv-60702 (S.D. Fla., filed April 11, 2022)
The Securities and Exchange Commission announced charges against an additional two individuals in connection with its investigation related to 1 Global Capital, LLC, a now bankrupt South Florida merchant cash advance company. The SEC previously charged 1 Global, its owner, and others with operating an allegedly fraudulent scheme that raised $322 million from at least 3,600 investors. The SEC also previously charged ten of 1 Global's top sales agents, for various registration violations.
In separate complaints, the SEC alleges that 1 Global's former chief financial officer, Eric A. Alexander, and its former director of business development, Scott A. Merkelson, participated in 1 Global's fraud on retail investors. According to the complaints, Alexander, a certified public accountant, and Merkelson, a former licensed securities professional, manipulated 1 Global's management fee to artificially raise or lower investors' monthly rates of return and signed monthly investor account statements that they knew contained these false rates of return. Additionally, according to the complaints, the monthly account statements Alexander and Merkelson signed falsely represented that an independent auditor had endorsed 1 Global's method of calculating investor returns.
The SEC's complaints, which were filed in federal district court in Miami, charge Alexander and Merkelson with violations of the antifraud provisions of the federal securities laws. Without admitting or denying the SEC's allegations, Alexander and Merkelson each consented to a permanent injunction, a $100,000 civil penalty and an officer and director bar. The settlements are subject to Court approval.
The SEC's investigation was conducted by Gary Miller in the Miami Regional Office and supervised by Elisha L. Frank and Glenn S. Gordon. The SEC's litigation is being led by Robert K. Levenson and supervised by Teresa Verges. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of Florida, the Federal Bureau of Investigation, and the Florida Office of Financial Regulation.