NEWARK (CN) – A New Jersey man and the two companies he runs will pay $3.7 million to settle SEC charges, and the boss man, Manuel M. Bello, agreed to be permanently barred from the securities industry, the SEC said.
The SEC sued Bello and his companies, Ayuda Equity Funding, and Amerifund Capital Holdings, all of North Butler, in Federal Court.
The agency claims Bello ran a stock-lending scheme that defrauded public company officials and brought restricted stock to market.
Bello and the companies agreed to disgorge $3.2 million of “allegedly ill-gotten gains,” plus interest, and Bello, of Kinnelon, N.J., will pay another $500,000 and be barred from the industry, the SEC said.
As is customary with the SEC, the defendants did not have to admit they did anything wrong.
The SEC said in a statement announcing the settled complaint: “Ayuda and AmeriFund reaped more than $3.2 million of illegal gains on loans to public company officers and directors who put up stock as collateral. Although some borrowers received written and oral assurances that the stock would not be sold as long as they did not default on their loan payments, Ayuda and AmeriFund sold the shares before or soon after making the loans, the SEC alleged.
“The SEC also alleged that in at least 35 loan transactions, Ayuda and AmeriFund sold the borrowers’ restricted shares into the market without registering the transactions and the firms and Bello themselves failed to register with the SEC as brokers or dealers. Without admitting or denying the SEC’s allegations, Ayuda, AmeriFund, and Bello consented to a final judgment permanently enjoining them from violating federal anti-fraud, broker-dealer registration, and securities registration laws. The settlement is subject to court approval.”