SEC Charges Matthew Krimm with Defrauding Investors
On April 25, 2017, the Securities and Exchange Commission (“SEC”) charged Matthew Krimm, a former mortgage loan officer, with defrauding investors, including mortgage loan customers of his former employer.
The SEC’s complaint, filed in federal court in Wilmington, Delaware, charges Matthew Krimm and the company he owned, Krimm Financial Services, LLC (KFS), with fraudulently inducing at least 25 investors to invest more than $1.69 million with Matthew Krimm and KFS in an unregistered offering of promissory notes. The complaint alleges that Krimm and KFS falsely claimed that they owned and operated their own highly successful mortgage loan business. The complaint also alleges that Matthew Krimm and KFS deceived investors by providing them with misleading offering documents, false income statements and false revenue and profit projections, all of which gave the false impression that KFS was operating a profitable business. According to the complaint, Krimm and KFS also falsely claimed that the monies raised would be used by KFS to expand its mortgage loan business, including opening new offices, hiring new loan officers and expanding its reverse mortgage lending business. The complaint alleges that, contrary to what investors were told, Matthew Krimm and KFS operated no mortgage lending business of their own, and they used over 75% of the money from new investors to pay Matthew Krimm’s personal expenses and to pay back prior investors to maintain the appearance that KFS was performing profitably.
In a parallel action, the Investor Protection Unit of the Delaware Department of Justice today announced criminal charges against Krimm.
The SEC’s complaint alleges that Matthew Krimm and KFS violated the antifraud provisions of the securities laws in Section 17(a) of the Securities Act of 1933 (Securities Act), and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, as well as the securities registration provisions in Sections 5(a) and 5(c) of the Securities Act. The Commission’s complaint seeks permanent injunctions, return of allegedly ill-gotten gains with prejudgment interest, and civil penalties.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or by email at [email protected]. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute, legal and compliance advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
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