SEC Files Federal Lawsuit Against Inofin, Inc. Alleging Securities Fraud

The Securities and Exchange Commission (SEC) has filed charges against Inofin Inc . of Rockland, Massachusetts, a subprime auto loan lender, and three current or former officers/board members of Inofin Inc. Filed on April 14, 2011 in federal district court in Massachusetts, the SEC complaint charges Inofin et al with misleading investors about their lending activities and diverting millions of dollars in investor funds for their personal benefit. The SEC also charged two agents with illegally offering to sell company securities without being registered with the SEC as broker-dealers.

If you or someone you know has sustained losses as a result of investing in Inofin Promissory Notes, you may be eligible for finanical compensation .

SEC Inofin Fraud Complaint:

According to the SEC's complaint, Inofin and principal officers, Michael Cuomo, Kevin Mann, and Melissa George misappropriated more than $110 million from hundreds of investors, which they collected by selling unregistered notes. The complaint alleges that Inofin, Cuomo, Mann, and George violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Sections 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint also alleges that defendants David Affeldt, a tax attorney, Kevin Keough, a past registered representative of Morgan Stanley Dean Witter, Inc., a past registered representative of Raymond James Financial Services, Inc. and a present registered representative employed by Bishop, Rosen & Co., and Nancy Keough, wife of Kevin Keough, violated Sections 5(a), and 5(c) of the Securities Act and Section 15(a) of the Exchange Act.

SEC Allegations:

The SEC alleges that investors were made to believe their investments would be used to fund subprime auto loans. Investors were told to expect a 9 to 15 percent return because investor money was lent to subprime borrowers at an average rate of 20 percent. Instead, the SEC alleges Inofin executives opened four used car dealerships and real estate property developments using one-third of investor money.

From 2006 to 2011, the loan servicer made material misrepresentations to its financial reports to hide its negative net worth and a declining financial condition, the SEC added. The worsening performance of Inofin was accordingly due to its failure to disclose its activities and the sale of some of its auto loan portfolio at a ‘substantial discount' from 2007 to 2009. During this period, Inofin had suffered heavy shortages in its cash, which it allegedly concealed from investors, and instead misrepresented the business as still profitable.

The SEC compounded the charges with violations of the antifraud and registration provisions of the federal securities laws on grounds that Cuomo, Mann, and George maintained Inofin's license to operate as a motor vehicle sales finance company. They allegedly falsified the financial statements submitted to Massachusetts Division of Banks, the licensing authority. The three agreed to the entry of civil injunctions against them and disgorgement of illegal profits with prejudgment interest and financial penalty.

Similarly, the SEC also sued as relief defendants two sales agents — David Affeldt and Thomas Keough – who offered to sell the unregistered securities. The complaint claimed that they generated more than $500,000 in referral fees between 2004 and 2009 for the illegal transaction. Keough's wife Nancy Keough is named in the complaint as a relief defendant for the purposes of recovering proceeds she received as a result of the violations.

Free Consultation to Investigate Allegations Against Inofin

If you or someone you know has sustained losses as a result of investing in Inofin Promissory Notes, you may be eligible for financial compensation . Give us a call for a free consultation or fill out our claim evaluation form and a member of our securities fraud team will contact you.

Additional Information About Inofin Fraud Case:

http://www.cutimes.com/2011/04/19/victims-of-110-million-inofin-subprime-lender-frau

http://www.sec.gov/litigation/litreleases/2011/lr21929.htm

http://www.placingtraders.com/news/read/493030

http://www.sec.gov/litigation/complaints/2011/comp21929.pdf

http://newsroom-global.com/2011/government-agencies/sec/sec-inofin-executives-defrauded-investors-in-sub-prime-auto-loan-financing/

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