SEC goes after unregistered broker who raised over $5.2M for 1 Global Capital
The United States Securities and Exchange Commission (SEC) today filed a complaint against Roger E. Dobrovodsky at the Florida Southern District Court.
The SEC’s complaint alleges that, from no later than March 2017 through July 2018, Dobrovodsky served as an unregistered broker on behalf of 1 Global Capital, LLC, a South Florida merchant cash advance company. During that time, Dobrovodsky raised more than $5.2 million for 1 Global from the offer and sale of securities in unregistered transactions to numerous investors in at least 60 transactions.
Dobrovodsky earned at least $317,690 in commissions from those sales.
1 Global marketed its investment as a safe and secure alternative to the stock market and falsely claimed that investing in the company’s merchant cash advance business would achieve high single-digit or low double-digit annual returns. Like other 1 Global sales agents, Dobrovodsky repeated those claims to prospective investors. He also repeated 1 Global’s false assertions that its notes were not securities.
But 1 Global’s business was a fraud. The company and its chairman and chief executive officer
Carl Ruderman were misrepresenting how they were using investor money, syphoning off millions in investor funds to fund Ruderman’s luxury lifestyle and operate unrelated businesses. 1 Global’s business came to a crashing halt when it filed for bankruptcy in July 2018, leaving many of Dobrovodsky’s customers and thousands of other investors with hundreds of millions of dollars in losses.
During the time he offered and sold 1 Global’s securities, Dobrovodsky was not registered as a broker-dealer with the SEC or associated with a registered broker-dealer. Additionally, 1 Global did not register its securities offering with the SEC and there was no applicable exemption from registration for this offering.
The regulator alleges that Dobrovodsky violated Sections 5(a) and 5(c) of the Securities Act of 1933 (“Securities Act”) [15 U.S.C. §§ 77e(a) and 77e(c)], and Section 15(a)(1) of the Securities Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. § 78o(a)(1)].
In this case, the SEC seeks an injunction against Dobrovodsky from future violations of these provisions, as well as disgorgement of ill-gotten gains, prejudgment interest on disgorgement, and a civil money penalty.