LITIGATION LAUNCH NO. 17422 / March 19, 2002
Securities and Exchange Commission v. ACE Payday Plus, LLC d/b/a ACE Payday Plus II, LLC, ACE Management, LLC, ACE Payday Management, Inc., and James Bianco, Case No. 1-02-20858-Civ. -Ungaro-Benages (S.D. Fla. March 19, 2002)
Today, the Commission filed an urgent situation cashland check cashing enforcement action in the us District Court when it comes to Southern District of Florida against ACE Payday Plus, LLC, d/b/a ACE Payday Plus II, LLC (“Ace Payday”), a company that is start-up providing “check cashing” and “payday advance” solutions; ACE Management, LLC and ACE Payday Management, Inc., two entities individually defined as Ace Payday’s Manager; and James Bianco (“Bianco”), whom managed Ace Payday as well as its affiliates. The Commission alleges that defendants raised at the very least $800,000 from at the least 30 investors by fraudulently providing and membership that is selling in Ace Payday through telemarketers called “independent product product sales offices” or “ISOs. ” The Complaint alleges that defendants told investors that 90% of this providing profits is used to produce Ace Payday’s company when, in reality, 40% to 45per cent went along to the ISOs as product product sales commissions. The Complaint additionally alleges that defendants lured investors by guaranteeing investment that is excessive and also by baselessly projecting extremely positive earnings as high as 720percent each year. The court issued an order temporarily restraining defendants from violating the antifraud and registration provisions of the federal securities laws, freezing defendants’ assets, and granting other emergency relief on the Commission’s motion. A hearing regarding the Commission’s motion for a injunction that is preliminary planned for April 5, 2002.
The Complaint names as defendants:
Ace Payday, a Florida liability that is limited headquartered in North Miami Beach, Florida.
Bianco, a resident of North Miami Beach, Florida, as well as the leader of Ace Payday, Ace Management, LLC, and Ace Payday Management, Inc.
Ace Management, LLC, identified when you look at the providing materials being a Florida restricted obligation business, Ace Payday’s “Manager, ” and “a specialist pay day loan and look cashing Management Co. “
Ace Payday Management, Inc., a Florida firm identified on Ace Payday’s Florida state filings since the LLC supervisor for Ace Payday.
The Complaint alleges that:
Defendants have carried out the providing in the form of different written materials, that they delivered to potential investors at the way associated with ISOs.
In these materials, defendants describe Ace Payday as being a start-up business in the industry of providing “retail wage advance” and “check cashing” services, declare that check cashing is possibly ” the quickest growing industry in the usa today, ” and encourage investors to “take advantageous asset of taking part in this lucrative industry. ” Defendants task that the business’s pay day loan operations will produce “the average of as much as 360% revenue per and that the business’s check cashing operations will create “up to 720per cent each year. 12 months” they feature investors (a) interest in the price of 20% per year become paid for a price of 5% each quarter for three years, and (b) a pro-rata share regarding the business’s earnings. In reality, between 40% and 45% associated with offering profits have now been utilized to pay the ISO’s, which behave as unregistered brokers soliciting investors that are unsophisticated. Defendants haven’t any foundation for guaranteeing 20% interest payable quarterly or projecting such positive earnings – particularly now, as Ace Payday currently has didn’t fulfill its quarterly responsibilities to investors.
The Commission’s problem charges most of the defendants with breaking the antifraud and enrollment conditions associated with federal securities legislation, specifically Sections 5(a), 5(c) and 17(a) of this Securities Act of 1933, Section 10(b) associated with the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. As well as the emergency relief described above, the Complaint seeks permanent injunctions prohibiting future violations associated with securities legislation, disgorgement, and civil charges.