All information in this report was compiled from public records maintained by the SEC.
Merchant Cash Advance Agreements and a Ponzi Scheme
Pavel Ruiz, 29, of Fort Lauderdale, Florida, on April 28 entered an offer of settlement for an SEC Order. The complaint alleged that from June 2020 through August 2021, Ruiz made false and misleading statements to investors regarding the use of their funds and misused and misappropriated around $6.5 million of investor money that went into bank accounts he controlled.
Ruiz was a board member and sales agent for MJ Capital Funding and acted as a broker and person associated with a broker during the period, but was not registered with the SEC. In a South Florida federal court, he was charged with conspiring to commit wire fraud through a Ponzi scheme linked to MJ Capital Funding.
Ruiz personally and through his sales agents solicited and raised about $46 million from more than 5,100 investors through fraudulent securities sales in unregistered transactions issued by MJ Capital. The securities were sold as “Merchant Cash Advance Agreements,” and Ruiz and his sales team told investors the proceeds would be used to make cash advance loans to businesses. Ruiz received commissions on these securities.
On April 27, 2023, a judgment was entered by consent against Ruiz, permanently enjoining him from future violations and barring him from association with any broker, dealer, municipal advisor, transfer agent, statistical rating agency, or municipal security dealer and from participating in any offering of a penny stock.
Ronald Frank Stevenson, 52, of Prescott, Arizona, on May 4, entered an offer of settlement for an SEC Order. Stevenson was found guilty of acting as an unregistered broker-dealer.
Stevenson sold securities of the EquiAlt Funds through his company American Financial Security, an entity he controlled and operated. When he sold these securities from February 2016 to February 2020, none of the offerings were registered with the SEC.
Stevenson sold investors three-to-five-year term debentures bearing 8% to 10% interest and received about 8% of the amount invested by investors as sales commission. He raised at least $19 million from investors and earned about $1.7 million in commissions.
The SEC barred Stevenson from associating with any broker, dealer, transfer agent, municipal security dealer, municipal advisor, or statistical rating organization and from participating in any offering of a penny stock.