Alaska Financial Company III Promoters Allegedly Misappropriated Investor Funds
Early last year the Alaska Financial Company III, LLC (AFC III) reached a settlement with the SEC after the company was charged with fraud. The SEC claim alleged a real estate fund run by AFC III scammed millions of dollars from investors.
AFC III was a family affair, run by Tobias Preston, his brother Charles Preston and son Caleb Preston. Between 2012 and 2016, the company raised more than $66 million from 300 investors, selling promissory notes in AFC III. The fraud came into play when they told investors the notes were secured by real estate and would give significant returns. This was not true.
In reality, the Prestons used the company to misappropriate $31 million of investor funds. Tobias used $17 million to buy a home in Mexico and fund other personal ventures. The family used another $14 million to pay operating expenses of their affiliate, McKinley Mortgage Co., LLC.
Learn Your Rights
If you’ve suffered significant losses in your investment accounts, talk to a lawyer who will explain your rights and options, free of charge.
Alaska Financial Company III investors may be able to recover losses
Bound by industry rules, brokers and advisors can only recommend investment products and strategies suitable for the need of their customers. They should be familiar with customer needs and research recommended investments. Brokerage firms are also required to track and supervise their brokers and advisors to be sure investments are suitable.
When a broker or firm violates these duties, customers suffer losses. Victims have the right to recover their losses under FINRA rules. If you suspect you have been a victim of investment fraud, you have the right to pursue an arbitration claim. If a broker, advisor or firm recommended investments in AFC III, a qualified attorney can help file a claim.
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