William Smith and Palm Beach Atlantic Financial Group Charged by SEC
On December 11, 2019, Palm Beach Atlantic Financial Group, LLC and its managing member and sole owner, William A. Smith, were charged by the Securities and Exchange Commission (SEC) “with engaging in the fraudulent offer and sale of over $1 million of securities, ostensibly to obtain capital for the purchase, remodeling, and operation of real estate properties.” Palm Beach Atlantic Financial Group’s website is no longer up and running (pbafinancialgroup.com), but you can view their LinkedIn page here. As the name suggests, they were active in South Florida, but they had dealings in several other states as well.
According to the SEC:
“from at least 2014 through early 2017, Smith engaged in the unregistered fraudulent offer and sale of over $1 million in securities to over thirty investors. According to the SEC’s complaint, Smith made numerous oral and written misrepresentations about the use of investor funds, including stating that funds would be used to purchase, remodel, and operate specific properties. However, the SEC’s complaint alleges that Smith shifted hundreds of thousands of dollars into and out of various bank accounts when he deemed it necessary to support whatever project needed funding at the time. In addition, Smith allegedly misled investors about Palm Beach’s track record of real estate investments by falsely claiming to have vast experience and success with a proven strategy that protected the investment assets as well as the investor.”
In the SEC’s complaint, they write that Smith made no efforts to verify that potential investors were truly accredited or not. Smith solicited investors through many means, including online videos, and even took part in drafting the PPM for the company. The PPM of course failed to comply with proper regulations, and failed to disclose the numerous ways in which Smith would using the money. He had various different entities set up through which he would transfer money raised at his discretion. Lastly, Palm Beach Atlantic made false representations about the success of the company. Many business owners may be enticed by being able to quickly raise money, but it is very important to have proper legal counsel so that in the long run you are doing what is best for your business and yourself.
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 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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Brenda Hamilton, Securities Attorney
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