The SEC alleges that Fernandez and Denizard misappropriated more than $1 million for their own use and operated numerous Ponzi schemes.
The Sonn Law Group is investigating allegations that Andres Fernandez and Edison Denizard committed federal securities law violations. Under FINRA Rules, brokerage firms are liable for their brokers’ misconduct or negligence and investors may be able to their investment through FINRA arbitration. Contact Sonn Law Group today or call us at 866–827–3202 for a free consultation.
According to the SEC complaint, Andres Fernandez and Edison Denizard raised substantial amounts of money from investors from 2015 through 2017, using companies they respectively controlled.
Fernandez, a resident of Orlando, Florida, was the principal of Kadaae, LLC (Kadaae) and Kadaae Entertainment Corp. (Kadaae Entertainment). Kadaae was formed by Fernandez in April of 2012. Kadaae Entertainment was formed in February 2015.
When Fernandez formed Kadaae Entertainment, he began seeking money from investors, representing that the money would be used to fund major concert events. He promoted the investment personally, through word of mouth, and through sales agents. He ultimately raised approximately $20.7 million from at least 56 investors.
Denizard, also a resident of Florida, was an early investor Kadaae Entertainment. In early 2015, he quit his full time job and formed Ahead of the Game, LLC (AOTG). He began to raise money for Kadaae Companies’ concerts, promoting the investment in the same manner as Fernandez. Denizard ultimately raised approximately $10.4 million from at least 78 investors.
In most cases, investors signed agreements with Kadaae or AOTG stating that the investment was being made for a “business venture” involving “music entertainment events.” The agreements usually lasted for two or three months, at the end of which investors would receive their principal back plus a purported return on their investment.
At one point, Fernandez distributed a marketing brochure to some investors showcasing a purported event by Kadaae, the “Art of Rap Tour.” According to the brochure, the tour would consist of 21 shows across the United States with major artists headlining, expected to generate a gross profit of $20 million.
Contrary to their representations, Kadaae Companies did not produce any concerts for major recording artists in the Orlando area and had no involvement in the Art of Rap Tour.
The investor money that was supposed to be spent on concerts was actually misappropriated by Fernandez. After receiving $1.65 million himself and distributing $2.2 million to AOTG, the remaining funds were used to make payments to investors in Ponzi scheme fashion and pay commission to sales agents.
Based on the allegations in their complaint, the SEC requested that Fernandez and Denizard both be enjoined from further securities violations, disgorge ill-gotten gains, pay a civil penalty, and that the court grant any other relief they deem appropriate.
Jeffrey R. Sonn is an experienced investor losses attorney. If you suffered losses because a financial professional committed acts in violation of FINRA Rules, Mr. Sonn will protect your rights and interests. Please do not hesitate to contact the Sonn Law Group today for a free review of your claim.