Arizona Republic

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The SEC claimed that Mortgages Ltd. Securities, an affiliate ofthe beleaguered Mortgages Ltd., raised more than $741 million from2,700 investors between February 2004 and June 2008. According tothe Republic, the firm's operators were accused of lying toinvestors about risks associate with the loans, and the impact ofthe real estate downturn on the investments. Mortgages Ltd.Securities agreed to the SEC's sanctions, but neither admitted ordenied them, the article says.

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Mortgages Ltd. was once considered the largest privatecommercial lender in the state. But the real estate crash, combinedwith an inability to raise new capital, meant the company wasunable to fulfill its loan obligations. The company ultimatelyfailed, which led to the collapse of projects including Centerpoint Condominiums.

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The SEC's fraud suit against Radical BunnyLLC, an investment firm that lent close to $200 million toMortgages Ltd. is still being pursued, the Republic notes. The SECfiled suit against Radical Bunny in July 2009, and the suit will beheard before a jury trial in May 2011.

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