Securities and Exchange Commission v. Suneet Singal, First Capital Real Estate Investments, LLC, First Capital Real Estate Advisors LP, and First Capital Real Estate Trust Inc., No. 19-cv-11452 (S.D.N.Y. filed December 13, 2019)
On July 13, 2021, the United States District Court for the Southern District of New York entered consent judgments against Suneet Singal and his entities, First Capital Real Estate Investments, LLC and First Capital Real Estate Advisors LP, as well as against First Capital Real Estate Trust Inc., for their various roles in two public company frauds. In addition, the SEC barred Singal from the securities industry.
The SEC’s complaint, filed on December 13, 2019, alleged that Singal and his entities engaged in two separate frauds relating to two public companies, First Capital Real Estate Trust Inc. (the REIT), which was also charged in the complaint, and a business development company (BDC).
According to the SEC’s complaint, Singal and the REIT made material misrepresentations and omissions concerning the REIT’s ownership of 12 hotels in several Forms 8-K. As to the BDC, the SEC’s complaint alleged that Singal acquired an interest in the BDC’s external adviser and then caused the BDC to make two $1.5 million loans to an entity that he controlled, which he then used for his own purposes.
The court entered final judgments against the defendants on July 13, 2021. Without admitting or denying the allegations in the complaint, the defendants consented to be enjoined from violating the anti-fraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. The judgments further enjoin Singal from violating the anti-fraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, as well as Sections 36(a), 57(a) and Rule 17d-1 of the Investment Company Act of 1940. Additionally, the judgments enjoin First Capital Real Estate Trust Inc. from violating, and First Capital Real Estate Advisors LP from aiding and abetting violations of, Section 15(d) and Rules 15d-1 and 15d-13 of the Exchange Act. In addition, Singal and First Capital Real Estate Investments, LLC agreed to pay, on a joint and several basis, $3.2 million in disgorgement and $676,400 in prejudgment interest, and Singal further agreed to pay a civil monetary penalty of $3.2 million. Finally, Singal consented to a bar for a period of 10 years from acting as an officer or director of a public company.
Further, based on the entry of the judgment, the SEC barred Singal from the securities industry with a right to reapply after 10 years.
Mark J. Astarita is a veteran securities attorney who represents investors and financial professionals nationwide in securities investigations and arbitrations. Have a question? Email him at firstname.lastname@example.org or call his office at 212-509-6544.