Registered investment adviser A.G. Morgan Financial Advisors (AGM), its owner, and its former chief compliance officer each face charges by the Securities and Exchange Commission for violations of federal securities laws, the agency announced this week.
According to the SEC’s complaint, AGM, owner Vincent Camarda, and AGM’s former Chief Compliance Officer James McArthur “solicited investors and offered or sold promissory notes to investors in connection with a more than $500 million unregistered fraudulent offering with lending company Complete Business Solutions Group, doing business as Par Funding.
The SEC previously charged Par Funding and others with operating a fraudulent scheme that raised hundreds of millions of dollars from investors nationwide.
According to the SEC’s complaint, AGM, Camarda, and McArthur raised more than $75 million from more than 200 investors, from August 2017 through July 2020, in connection with Par Funding’s unregistered securities offering. In doing so, they received more than $7 million in compensation.
“While soliciting investors, AGM and Camarda violated their fiduciary duty to their investment adviser clients by failing to disclose to investors that they had a conflict of interest,” the SEC stated in its complaint.
The SEC alleges the defendants offered and sold securities to investors without approval from the registered broker-dealer with whom they were associated. The SEC further alleges in its complaint that in 2017 AGM and Camarda failed to inform advisory clients that AGM had borrowed, and had not fully repaid, approximately $750,000 from Par Funding.
The SEC complaint, filed in U.S. District Court in the Eastern District of New York, charges AGM, Camarda, and McArthur with violating the registration provisions of the Securities Act of 1933 and acting as unregistered broker-dealers in violation of the Securities Exchange Act of 1934.
The SEC also charges and AGM and Camarda with violating the antifraud provisions of the Investment Advisers Act of 1940. The SEC seeks permanent injunctions, disgorgement plus prejudgment interest, and civil monetary penalties. 
Jaclyn Jaeger is a contributing editor at Compliance Chief 360° and a freelance business writer based in Manchester, New Hampshire.