Investors should seek damages after FF Fund Management, LLC brokers recommended investments that were unsuitable.
FF Fund Management, LLC (FFM), a Florida-based investment adviser, and its sole owner Andrew Franzone were charged by the SEC with fraudulently raising and misappropriating tens of millions of dollars from the sale of limited partnership interests in a private fund, FF Fund I, LP.
In a press release, the SEC detailed allegations against FFM and Franzone. The complaint alleges that Franzone defrauded investors by making misrepresentations regarding FFM’s strategy and investments, failing to eliminate or disclose conflicts of interest, misappropriating fund assets, and falsely representing that the fund would be audited on an annual basis.
Between August 2014 and September 2019, Franzone is accused of telling potential and existing investors that the investment strategy was to maintain a highly liquid portfolio primarily focused on options and preferred stock trading. Through his misrepresentations, Franzone allegedly raised more than $38 million from approximately 90 investors.
Despite Franzone’s assertions, he allegedly diverted substantial FFM assets to an entity he owned and invested FFM’s remaining assets in highly illiquid private companies and real estate ventures. Franzone is also accused of failing to eliminate or disclose multiple conflicts of interest in connection with his management of FFM and of misusing fund assets.
The SEC alleged that Franzone and FFM removed a critical safeguard designed to protect investors by failing to audit the fund on an annual basis, despite assertions that they would do so. FFM filed for bankruptcy on September 24, 2019.
The SEC charged Franzone and FFM with violations of the antifraud provisions of the federal securities, including Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2), and 206(4) of the Advisers Act of 1940 and Rule 206(4)-8 thereunder, and is seeking disgorgement of ill-gotten gains, civil penalties, and permanent and conduct-based injunctive relief.
If your broker recommended you purchase investments in FFM, you may be entitled to recover losses from the brokerage firm that sold you the investments.
Contact Sonn Law to Discuss Recovery Options
The Sonn Law Group is currently investigating allegations that brokers recommended investments in FF Fund Management LLC. We represent investors in claims against negligent brokers and brokerage firms. If you or your loved one experienced investment losses, we are here to help. For a free consultation, please call us now at 866-827-3202 or complete our contact form.