Upstate man ran ‘sham’ companies, SEC says
An Upstate man ran loan companies the Securities and Exchange Commission called a sham and used the money to finance a lavish lifestyle, officials said. The SEC on Tuesday announced charges against Michael J. French, of Pendleton, and two companies controlled by him, MJF Holdings , LLC (“MJF Holdings”) and MJF Capital, LLC (“MJF Capital”), for defrauding investors and misappropriating million in investor funds. According to the SEC’s complaint, French, through MJF Holdings, sold more than $20 million in high-yield bonds to more than 400 investors nationwide. The complaint alleges that French falsely told investors that the notes ̵[ads1]1; which promised a 12% return for a one-year investment – were backed by a low-risk investment program in which the proceeds would be loaned to small businesses and/or invested in commercial loans on a fractional basis to provide yield. The complaint also states that French claimed that the loans chosen for investment to cover the promissory notes were strictly underwritten and thus posed little risk to investors. According to the SEC’s complaint, the lending program was a fraud, and French used the money he raised to pay back previous investors and finance a lavish lifestyle. The complaint also states that French eventually defaulted on the notes and stopped communicating with investors. The complaint, filed in the United States District Court for the Northern District of Georgia, charges French and MJF Holdings with violating the registration provisions of Section 5 of the Securities Act of 1933 and the anti-fraud provisions of Section 17(a) of the Securities Act of 1933, and Section 10 (b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint accuses MJF Capital of aiding and abetting French’s and MJF Holdings’ alleged fraud. The complaint also names seven other entities allegedly controlled by the French. The SEC is seeking a permanent injunction, an asset freeze, an accounting, disgorgement of all ill-gotten gains plus prejudgment interest and civil penalties. The SEC’s investigation was conducted by Grant Mogan, Andrew D. Mason and Tiffany Kunkle, with assistance from Taryn Hairston, all of the Atlanta Regional Office, and supervised by Thomas B. Bosch and Justin C. Jeffries. The litigation is led by Kristin Murnahan and Graham Loomis. A background check conducted by WYFF News 4 showed that French was also arrested in Lee County, Fla., on March 6. According to the Lee County Sheriff’s Office website, French is charged with aggravated stalking. , intimidation written/electric threat to kill another person, obstruction of justice and fraud. The police report said French pursued a woman he met through TikTok. The report also said the woman had received a subpoena in reference to an active US Securities and Exchange Commission (SEC) investigation, in which French was listed as a fraud suspect.
An Upstate man ran loan companies the Securities and Exchange Commission called a sham and used the money to finance a lavish lifestyle, officials said.
The SEC announced charges Tuesday against Michael J. French, of Pendleton, and two companies controlled by him, MJF Holdings, LLC (“MJF Holdings”) and MJF Capital, LLC (“MJF Capital”), for defrauding investors and misappropriating of millions in investor funds.
According to the SEC’s complaint, French, through MJF Holdings, sold more than $20 million in high-yield bonds to over 400 investors nationwide.
The complaint alleges that French falsely told investors that the notes – which promised a 12% return for a one-year investment – were backed by a low-risk investment program in which the proceeds would be loaned to small businesses and/or invested in commercial loans on a fractional basis to provide yield.
The complaint also states that French claimed that the loans chosen for investment to cover the promissory notes were strictly underwritten and thus posed little risk to investors.
According to the SEC’s complaint, the lending program was a sham, and French used the money he raised to pay back previous investors and finance a lavish lifestyle.
The complaint also says French eventually defaulted on the notes and stopped communicating with investors.
The complaint, filed in the United States District Court for the Northern District of Georgia, charges French and MJF Holdings with violating the registration provisions of Section 5 of the Securities Act of 1933 and the anti-fraud provisions of Section 17(a) of the Securities Act. Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
The complaint accuses MJF Capital of aiding and abetting French’s and MJF Holdings’ alleged fraud.
The complaint also names seven other entities allegedly controlled by the French.
The SEC is seeking a permanent injunction, an asset freeze, an accounting, disgorgement of all ill-gotten gains plus prejudgment interest and civil penalties.
The SEC’s investigation was conducted by Grant Mogan, Andrew D. Mason and Tiffany Kunkle, with the assistance of Taryn Hairston, all of the Atlanta Regional Office, and supervised by Thomas B. Bosch and Justin C. Jeffries.
The litigation is led by Kristin Murnahan and Graham Loomis.
A background check conducted by WYFF News 4 showed that French was also arrested in Lee County, Fla., on March 6.
According to the Lee County Sheriff’s Office website, French faces charges of aggravated stalking, intimidation written/electronic threat to kill another person, obstruction of justice and fraud.
The police report said French pursued a woman he met through TikTok.
The report also said the woman had received a subpoena in reference to an active US Securities and Exchange Commission (SEC) investigation, in which French was listed as a fraud suspect.
