The Securities and Exchange Commission (SEC) has charged the former president of a purported private equity real estate firm with defrauding nearly 500 investors who purchased promissory notes under the false premise that they were secured by specific properties or other collateral. The SEC alleges that Larry Polhill used his company American Pacific Financial Corporation (APFC) to buy and sell real estate and distressed assets, and he offered investors the opportunity to invest in the company through unregistered notes.  However, the collateral that Polhill and APFC claimed made the investments secure was often non-existent or otherwise impaired.  The properties underlying the investments were sometimes even sold without notice to investors.

Mr Polhill has agreed to settle the SEC’s charges and be barred from acting as the officer or director of any public company.