Thank you for sharing!

Your article was successfully shared with the contacts you provided.

PHOENIX-The SEC has filed securities fraud charges concerning false and misleading statements against Radical Bunny, which lent close to $200 million to Mortgages Ltd.

PHOENIX-The Wall Street Journal and Arizona Republic report the U.S. Securities and Exchange Commission has filed suit for alleged fraud against a firm that lent close to $200 million to the beleaguered Mortgages Ltd. Both articles state the suit alleges that local investment firm Radical Bunny LLC and its principals made misleading statements about the performance of their investments to investors.

The Republic and Wall Street Journal report the suit, which was filed Tuesday in Phoenix federal court, contended that defendants Tom Hirsch, Berta Walder, Howard Walder and Harish Shah made false claims about how funds raised from investors nationwide would be used. The Wall Street Journal’s article notes that SEC’s Los Angeles regional office director Rosalind Tyson said the defendants also claimed the safety of their investments even while the funds were being directed toward riskier and fewer loans through Mortgages Ltd. Two of the defendants, Hirsh and Shah, are partners in an accounting firm that handled the personal accounts of Mortgages Ltd.’s founder, Scot Coles.

The Republic article notes that between 2005 and 2008, Radical Bunny raised approximately $197 million from about 900 investors, then used the money to make high-interest loans to Mortgages Ltd. The SEC’s filing states that Radical Bunny had told its investors that the money would be used only for commercial developments; but Mortgages Ltd. wasn’t limited in how it could use the money.

The suit is seeking an injunction and financial penalties against the defendants. The Republic article reports that Tucson attorney Bruce Heurlin, who is representing the four defendants, denied the SEC’s charges, noting that the Radical Bunny members were assured by Mortgages Ltd. that there were no violations involved in any of the funds used. The Republic article also notes that Radical Bunny’s managing director Hirsch, when reached by telephone, hung up without comment.

Mortgages Ltd., which went into bankruptcy a little more than a year ago, emerged from Chapter 11 status last April and recently received $20 million as part of its reorganization plan. Meanwhile, investors forced Radical Bunny into bankruptcy late in 2008.

More information about the suit and allegations is available in the Wall Street Journal and Arizona Republic.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.