The SEC claimed that Mortgages Ltd. Securities, an affiliate of the beleaguered Mortgages Ltd., raised more than $741 million from 2,700 investors between February 2004 and June 2008. According to the Republic, the firm's operators were accused of lying to investors about risks associate with the loans, and the impact of the real estate downturn on the investments. Mortgages Ltd. Securities agreed to the SEC's sanctions, but neither admitted or denied them, the article says.
Mortgages Ltd. was once considered the largest private commercial lender in the state. But the real estate crash, combined with an inability to raise new capital, meant the company was unable to fulfill its loan obligations. The company ultimately failed, which led to the collapse of projects including Centerpoint Condominiums.
The SEC's fraud suit against Radical Bunny LLC, an investment firm that lent close to $200 million to Mortgages Ltd. is still being pursued, the Republic notes. The SEC filed suit against Radical Bunny in July 2009, and the suit will be heard before a jury trial in May 2011.
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