Securities and Exchange Commission v. Complete Business Solutions Group, Inc., et al.
Case No. 20-cv-81205-RAR
United States District Court for the Southern District of Florida
Frequently Asked Questions
The Receiver will update this page with frequently asked questions and inquiries.
The Receiver is the individual who assumes responsibility for all assets of the entities in receivership in the civil enforcement action brought by the SEC. He is responsible for determining how the business was operated and where its assets are located. He also is charged with operating the business and reporting to investors and other interested parties. Ultimately, the Receiver will determine the amounts owed to individual creditors and investors and will distribute available assets in accordance with a plan approved by the Court.
A receiver is an officer of the Court, not an employee of the Securities and Exchange Commission, and ultimately answers to the Court. In this case, Ryan K. Stumphauzer, Esq., is the Court-appointed Receiver for the various Receivership Entities.
The Court’s Order governs the authority of the Receiver. Federal courts have specific powers, known as “equitable” powers, to order relief to advance the purposes of the federal securities laws, preserve investor funds, and ensure that wrongdoers do not profit from their unlawful conduct. Courts may grant broad powers to receivers, including the authority to sue on behalf of the receivership and to gather, manage and liquidate receivership assets on behalf of potential creditors and harmed investors. A receiver is charged with acting in “good faith” and performing his duties with “reasonable diligence.” A receiver is generally required to report to the Court periodically for the property entrusted to him.
It is too soon to determine what will happen to the Receivership Entities. The Receiver is currently exploring various possibilities with respect to the continued operations of the Receivership Entities and has engaged a consultant, Development Specialists, Inc., who is assisting the Receiver to: (a) review and analyze the financial records of the Receivership Entities; (b) conduct financial analysis and forensic accounting services; and (c) assess the ongoing operations of the Receivership Entities and provide input and guidance regarding the management and oversight of the day-to-day operations of the Receivership Entities, including efforts to collect on accounts receivable and to maximize recovery for investors. At the appropriate time, the Receiver will submit his recommendations regarding ongoing operations to the Court. Ultimately, the Court will be responsible for considering and approving the Receiver’s proposed plan. The Court must conclude that the proposed plan is fair and reasonable and appropriately protects the interests of the investors in the Receivership Entities.
The Receiver is in the process of addressing these issues and evaluating operations and will be reaching out to the employees of the Receivership Entities soon with additional information.
The Court has entered an Order freezing all assets and funds of the Receivership Entities until the Court authorizes otherwise.
Under the current Receivership Order, the Receiver is only in control of the specific funds and entities that are identified in the list of Receivership Entities, which you may review at the following link. The Receiver is currently investigating whether these other investment products were, in fact, treated as separate and distinct from the Par Funding investment products and, if so, whether those other investments should be included within the scope of the Receivership. That decision will ultimately need to be addressed with the Court. The Receiver will provide more information regarding this issue as soon as it is available.
Under the current Receivership Order, the Receiver is only in control of the specific funds and entities that are identified in the list of Receivership Entities. The various funds that included investments in life settlement policies are not currently included among the Receivership Entities, but the Receiver is working with the parties in this litigation to determine when payments and other expenditures are due and to ensure that appropriate arrangements are made with respect to those obligations.
The Receiver is aware of several additional agent-managed funds that provided investment opportunities into Par Funding, but which are not currently included among the Receivership Entities. As these proceedings progress, it is possible that the Court may expand the scope of the receivership to include some of these other funds. The Receiver will provide an update on these other funds as soon as additional information is available.
It is too soon to determine how much investors will receive from the Receivership Entities. The Receiver is working to protect the assets of the Receivership Entities, but there is no way to predict at this early date how much will be returned to each investor or when that will happen.
The Receiver is evaluating Par Funding’s ability to make interest payments and distribute principal to these funds and will provide an update on these matters as soon as additional information is available.
The Receiver is not a financial or retirement advisor and is not in a position to provide financial or legal advice to investors.
Yes. These documents, and other filings and court orders that may be of interest be found on the Key Court Documents page.
No. The Receiver is an agent of the Court and is effectuating the Court’s orders. The Receiver will, however, be investigating potential claims or methods of recovery that he can pursue for the benefit of investors in the Receivership Entities.
Although the Receiver cannot provide you legal advice, you certainly have the right to hire or consult with your own lawyer. As authorized by the Court, however, the Receiver will be investigating all potential claims or methods of recovery that he can pursue for the benefit of investors in the Receivership Entities.
At this early stage of the proceedings, we cannot predict how long it will take to complete this process.
Please review the Receiver’s message to Par Funding’s merchants, which is available at the following link.
Contact information for the Receiver is available through the following link.