Henry Paul Regan, Jr. a United States citizen living in Colombia, who was associated with five different registered broker dealers and previously held Series 7 and 63 securities licenses, was charged by the United States Securities and Exchange Commission with defrauding more than 330 U.S. based investors out of more than $63 million.
Filed in the U.S. District Court for the Southern District of New York, the SEC complaint charges Regan with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, key anti-fraud provisions of the federal securities laws.
The SEC complaint alleges that: Regan solicited investors through selling promissory notes and partnership interests in his affiliated companies, including, but not limited to, Next Level Holdings LLC, Yield Capital Management Inc., and Yield Wealth Ltd., promising annual returns as lofty as 15.5% for 3-to-10-year terms. Regan also stated that both investments were fully insured. Although a small portion of the investments was insured, the vast majority was not. Notwithstanding this, Regan arranged for most investors to receive forged insurance/surety bond agreements or limited partnership agreements containing false insurance guarantees. Regan communicated materially false and misleading statements concerning the Next Level and Yield securities directly both orally and in writing and indirectly through a network of insurance brokers that he recruited to sell the investments, as contended by the SEC in its enforcement action.
According to the complaint, Regan claimed he would pay these returns from profits generated by using investor funds to purchase and sell unrefined Colombian-sourced precious metals and by investing in health insurance policies issued under the Affordable Care Act, which Regan claimed generated monthly payments guaranteed by the federal government. Instead of using investor funds for these stated purposes, Regan allegedly used most of the funds to make Ponzi-like payments to earlier investors, pay approximately $7.8 million for commissions to his network of salespeople, and wired funds to dozens of companies purporting to be in the import/export business, many of which were based in China. After media scrutiny on the offerings, firms and brokers terminated their relationship with Regan’s companies, so he ceased paying and communicating with investors.
FINRA previously barred Regan from association with any FINRA member in any capacity for failing to respond to a request for documents and information, known as a 8210 Request. In 2017, Regan pleaded guilty to one count of organized fraud greater than $50,000 in Miami-Dade County Court for the State of Florida in connection with the sale of promissory notes that promised guaranteed returns. Regan was sentenced to 10 years’ probation, which was terminated in 2024. The SEC seeks injunctions, disgorgement, prejudgment interest, and penalties. In a parallel action, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Regan.
SEC Securities Fraud Defense Lawyer David Chase
Nationally acclaimed SEC investigation lawyer David Chase, of the Law Firm of David R. Chase, has successfully represented companies and individuals in SEC investigations throughout the nation for more than 25 years, having served in the SEC’s Division of Enforcement in its Miami, Florida Office in the position of Senior Counsel. David handles insider trading investigations, spoofing cases, investment advisor violations and crypto fraud. If you are under SEC investigation, or just received a SEC Subpoena and require a seasoned strategic representation to guide you through the SEC investigation process and protect your legal rights, contact David at: 800-760-0912 or e-mail him at: david@davidchaselaw.com. Visit the Firm’s website to read about David’s SEC defense experience and the firm’s recent successful results for its clients at: www.securitiesfrauddefense.net.
