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Commission Finds Phoenix Insurance Producer and His Company Defrauded Investors
The Corporation Commission ordered Arizona insurance producer Patrick Jon Runninger of Phoenix and his affiliated company, The Financial Group, LLC, to pay $3,606,451 in restitution and $100,000 in administrative penalties for defrauding investors in a real estate investment scheme.
The Commission found that Runninger and The Financial Group LLC told potential investors that their investment money would be used to flip, lease, or purchase distressed or foreclosed real estate.
The Commission found Runninger and his affiliated company failed to disclose to investors that they were getting paid commissions that were derived from a percentage of the principal amount invested, when the subscription agreements given to investors by the respondents stated they did not receive commissions.
Also, the Commission found that Runninger and The Financial Group LLC failed to inform some of the investors that there was a penalty or fee associated with early withdrawals before the investment had matured, and generally misrepresented to investors the risks associated with the EquiAlt debentures.
In February of 2020, the U.S. Securities and Exchange Commission (SEC) filed a complaint against EquiAlt, LLC and its principals. In its complaint, the SEC alleged that EquiAlt had been conducted as Ponzi scheme since 2011 and raised over $170 million from the sales of EquiAlt debentures to over 1,100 investors nationwide.
All documents relating to this agenda item can be found in the Corporation Commission's online docket at https://edocket.azcc.gov and entering docket number S- 21130A-20-0339.
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