A Better Financial Plan Investment Fraud Class Action

Edelson Lechtzin LLP is co-lead counsel in a class action lawsuit against A Better Financial Plan, and certain affiliated persons and entities (Defendants), alleging violations of the federal Racketeer Influenced and Corruption Organizations Act (RICO), and state claims for negligent misrepresentation, breach of fiduciary duties, conspiracy, fraud, unjust enrichment, aiding and abetting fraud, and aiding and abetting breach of fiduciary duties, to recover millions of dollars’ worth of investments by individuals who were fraudulently induced by Defendants to use their hard-earned savings to purchase unregistered securities backed by risky merchant cash advance loans to small businesses.

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The Complaint’s Allegations

In order to carry out their fraudulent scheme, the Complaint alleges that Defendants created and disseminated false and misleading radio advertisements and engaged in deceptive in-person solicitations in order to persuade individual investors to purchase securities backed by risky merchant cash advance loans pursuant to false and misleading Private Placement Memoranda and Subscription Agreements with a series of Delaware companies that were formed and promoted by Defendants.

Defendants failed to disclose that ABFP’s unregistered securities were backed by high-risk merchant cash advance loans to small businesses that lacked the creditworthiness to obtain conventional bank financing. While such merchant cash advance loans have high default rates, Defendants falsely represented that the ABFP’s investments “offer higher returns with less risk than anything you can find on Wall Street…”

The Truth Begins To Emerge

Defendants’ scheme began to unravel in March 2020, when thousands of small businesses defaulted on the merchant cash loans underlying the investments sold by ABFP. Panic among ABFP investors ensued when the interest payments stopped in March 2020. In late March 2020, ABFP admitted that the merchant cash lender, Par Funding, was insolvent. By the end of April 2020, ABFP had fraudulently induced hundreds of investors to enter into a so-called Exchange Notes Offering, which would pay ABFP investors 4% interest, instead of the promised 10% interest, and the repayment of principal will be delayed from the promised 1-year term to 7 years. This deal is an unmitigated disaster for ABFP investors, who include elderly persons and others on fixed incomes.

How To Join The Case

If you wish to join this case, please click here to submit your information.