PLCMGMT LLC dba Prometheus Law – SEC Files Complaint | Goodman & Nekvasil P.A. May Recover Investor Losses
Securities and Exchange Commission Files Complaint Against PLCMGMT LLC dba Prometheus Law
ACCORDING TO THE SEC:
The Securities and Exchange Commission charged a Los Angeles-based litigation marketing company and its co-founders with defrauding retirees and other investors who were told their money would be used to help gather plaintiffs for class-action and other lawsuits and they would earn hefty investment returns from settlement proceeds.
The SEC alleges that James Catipay and David Aldrich raised $11.7 million from approximately 250 investors during the past three years for their company PLCMGMT LLC, also referred to as PLC or Prometheus Law. But only $4.3 million was actually used to locate prospective plaintiffs for lawsuits, and the company has generated scant revenue from any settlements. Catipay and Aldrich have instead diverted millions of dollars for their personal use while failing to deliver the promised 100 to 300 percent returns to investors. In fact, PLC is obligated to pay investors at least $31.5 million.
“We allege that Catipay and Aldrich have defrauded investors, many of them retirees, by repeatedly downplaying the risks associated with their investments and the fact that their entire business model was unrealistic to afford the exorbitant returns promised,” said Michele W. Layne, Director of the SEC’s Los Angeles Regional Office
According to the SEC’s complaint filed in U.S. District Court for the Central District of California:
· Investors were told their funds would be used for marketing and advertising to locate plaintiffs for cases involving failed prescription drugs or medical devices. Each investor’s money would be associated with a specific potential plaintiff. PLC would refer the potential plaintiffs to a contingency-fee attorney and use proceeds of lawsuit settlements to pay investor returns.
· The arrangements purportedly enabled investors, who were mostly non-attorneys, to split legal fees with the lawyer who actually litigated a particular lawsuit, which is generally prohibited.
· PLC, Catipay, and Aldrich enticed investors by claiming the investments were safe and “guaranteed” when in fact they were highly speculative and risky because only certain potential plaintiffs would typically qualify as actual plaintiffs, and even if a case was filed there was no guarantee they would win the lawsuit.
· In addition to the false and misleading statements, PLC, Catipay, and Aldrich misused $5.6 million in investor funds for personal purposes, including more than $1 million for Aldrich’s personal income taxes and another million dollars to purchase a residential condominium in the name of Aldrich’s privately-held company.
· Aldrich and Catipay also took large salaries and admitted to SEC investigators that they have made Ponzi payments to several PLC investors.
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If you incurred investment losses in PLCMGMT LLC dba Prometheus Law and would like your case evaluated by a securities attorney (again, there is no charge for an evaluation and all cases are handled on a purely contingency fee basis), please contact us.
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