- 1The SEC alleges 5G Funding collected in full on only about 30 of 184 MCAs.
- 25G raised $4.5M from 23 investors and was insolvent by mid-2023.
- 3The SEC seeks relief on two securities fraud counts.
The Securities and Exchange Commission has sued 5G Funding and its owner, alleging the company misrepresented the profitability of its merchant cash advance business to investors.
The allegations
5G Funding presented its MCA portfolio as profitable. The SEC's complaint says otherwise: "The Portfolio was never profitable." According to the filing, 5G collected the full amount due on only about 30 of the 184 merchant cash advances.
The company was formed in 2021 and was insolvent by mid-2023. It had raised $4.5 million from 23 investors. The SEC alleges the owner misappropriated much of that money, using it for a down payment on a home, personal gambling expenses, and purchases of cars and watches.
Relief sought
The agency is seeking relief on two counts of securities fraud.
Source reporting: deBanked.
