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Miami Investment Fraud Attorney
305.372.9700
1 SE 3rd Ave # 1200
SunTrust International Center
Miami, Florida 33131

SEC Charges Florida Investment Advisory Firm, Managing Partner in Fraud Case Involving Unregistered Securities

On March 10th, 2020, the Securities and Exchange Commission (SEC) announced securities fraud charges against Kinetic Investment Group LLC—a Sarasota, FL-based investment advisory company—and firm’s managing partner Michael Scott Williams.

Regulators believe that the Kinetic Investment Group offered fraudulent, unregistered securities to investors in Florida and Puerto Rico. The company took in more than $39 million and at least 30 investors were affected. Here, our Miami investment fraud lawyers provide an overview of the charges filed by the agency.

Legal Complaint: SEC Alleges Managing Partner Misappropriated Funds   

In a complaint filed in the United States District Court for the Middle District of Florida, the SEC contends that Kinetic Investment Group and Michael Scott Williams raised nearly $40 million from at least 30 different investors in Florida and Puerto Rico. In soliciting money from investors, Kinetic Investment portrayed itself as a hedge fund that operates a group of sub-funds with holdings in American-based, income producing assets. The funds were advertised to actual and prospective investors as “safe” and “highly liquid.”

The SEC believes that these were false promises. Using a web of connected companies. Mr. Williams allegedly failed to make all of the advertised investments. In reality, a significant share of investor money was diverted to help provide capital to a business called “Lendacy”— a startup company that is owned and operated by Michael Scott Williams. Between 2015 and 2020, the SEC alleges that Mr. Williams diverted at approximately $6.3 million to fund his startup and for his own personal use.

Emergency Assets Freeze Granted, SEC Seeking Disgorgement and Restitution 

As a result of the material misrepresentations made by Michael Scott Williams, investors were exposed to serious risks. They were offered false promises that their funds were secure and liquid. Unfortunately, the SEC believes that a significant share of these assets have been improperly diverted and used by Mr. Williams. Investors never signed up to fund a risky startup business.

The SEC obtained an emergency assets freeze from a federal judge. Additionally, the judge ordered Kinetic Investment Group and Michael Scott Williams to preserve all documents and records that may be relevant to this case. The agency is currently seeking a disgorgement of all ill-gotten profits, complete financial restitution for the affected investors, and monetary sanctions against the defendants. If you lost money in unregistered securities sold by Kinetic Investment Group, you need professional representation.

Call Our Miami, FL Unregistered Securities Attorneys for Immediate Assistance

At ​Carlson & Associates, P.A., our Florida investor losses lawyers have extensive experience handling complex unregistered securities claims. We will help you take legal action to get justice and accountability.

If you or your family member suffered financial losses as a result of a financial adviser offering unregistered securities, our law firm is ready to help. Call us now for a confidential review of your case. With an office location in Miami, we represent investors in Miami-Dade County, Broward County, Palm Beach County, and throughout Florida.

Resources:

sec.gov/news/press-release/2020-56

sec.gov/litigation/complaints/2020/comp-pr2020-56.pdf

https://www.carlson-law.net/securities-and-exchange-commission-awards-more-than-7-million-in-compensation-to-a-whistleblower/

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