Florida business lender accused of accounting fraud settles with SEC

[May 14, 2020]  By Lawrence Delevingne

BOSTON (Reuters) - Miami-area direct lending firm TCA Fund Management Group Corp and its affiliates reached a settlement with U.S. securities regulators over allegations of fraudulent revenue recognition that inflated the value of its private funds, according to a judgment on Wednesday entered in Miami federal court.

The TCA entities, including its flagship TCA Global Credit Fund GP Ltd, consented to a permanent injunction on additional violations of securities law and the appointment of a receiver, without admitting or denying the allegations. TCA may also pay the disgorgement of ill-gotten gains and civil penalties, according to the judge's order.

TCA, which lent money at high interest rates to small businesses, allegedly inflated the net asset value of its private funds by at least $130 million as of November 2019, when assets were reported to be $516 million overall, according to the Securities and Exchange Commission's (SEC) complaint on Monday.

TCA founder Robert "Bob" Press and Carl Schoeppl, an attorney for TCA, did not immediately respond to a request for comment.

On Tuesday, the SEC announced it has obtained the appointment of a receiver, Miami attorney Jonathan E. Perlman, who will oversee the wind down of TCA's funds for about 470 investors.

The SEC also said on Tuesday that the investigation related to TCA was ongoing.

(Reporting by Lawrence Delevingne; Editing by Bill Berkrot)

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