The SEC charged Dwayne Edwards with fraud and obtained an emergency asset freeze against the South Carolina businessman. The SEC alleges that he funneled money he obtained from investors who believed their money would be used for buying and renovating senior housing facilities. According to the commission, Dwayne Edwards illicitly commingled funds from a number of municipal bond offerings and the revenues of the facilities underlying the offerings. Each offering was purported to fund a specific assisted living or memory care facility in Alabama or Georgia. Edwards used investor funds for his own private use in addition to funding other unrelated bond offerings, according to the SEC. The complaint accuses Edwards of violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934.
The complaint was filed in Newark, New Jersey federal district court. The court granted the SEC’s request to freeze the assets of Edwards. The court also appointed a temporary receiver over the facilities.
SEC Rule 10b-5 prohibits any act or omission resulting in fraud or deceit in connection with the purchase or sale of any security. To establish its case against Edwards the SEC will have to show (i) Manipulation or Deception (through misrepresentation and/or omission); (ii) Materiality; (iii) “In Connection With” the purchase or sale of securities, and (iv) Scienter.The Frankowski Firm has years of experience representing investors who have lost money as the result of fraudulent schemes. If you or someone you know has lost money as a result of such a scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.