The SEC filed fraud charges against an Atlanta-based investment firm and two of its executives for their handling of the city’s pension funds for police, firefighters, transit workers, and other employees.

According to the SEC, Gray Financial Group Inc. placed public pension funds into an investment that did not adhere to state law and collected over $1.7 as a result.

The group, its and founder and president, Laurence Gray, and co-Chief Executive Officer Robert Hubbard IV allegedly breached their fiduciary duties by soliciting investments in an alternative fund called GrayCo Alternative Partners II LP.

The group’s attorney responded by stating that the “claims and arguments in the SEC’s filing today are without merit.”

The SEC claims that the investments violate Georgia law because they did not have at least four other investors and did not have a minimum of $100 million in assets.

Also, a Georgia public pension fund’s investment is limited to no more than twenty percent of the capital in an alternative fund, but two of the pension funds’ investments allegedly exceeded the limit.

The firm is accused of making misrepresentations when asked if the investments complied with the law and about the number and identity of prior investors.

“The SEC is once again bringing its charges in an unconstitutional and home-cooked administrative proceeding rather than trying a case before an impartial U.S. district court and a jury of one’s peers,” the group’s attorney said on Thursday. Gray will “vigorously defend itself” in both proceedings, he added.

If you or someone you know has lost money as a result of an investment or Ponzi scheme, please contact Richard Frankowski at 888-741-7503 to discuss your potential legal remedies or complete the contact form.