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2w ago

SEC Sues Buyers of RadioShack and Pier 1 Over Alleged $112 Million Investor Fraud

Regulators pursue penalties, disgorgement, officer-director bars in a civil case over fundraising tied to eight distressed retailers.

File photo of a RadioShack retail location in Mount Laural, New Jersey, photographed in 2014. © Photo by John Greim/LightRocket via Getty Images
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MAY 19: PIER 1 IMPORTS | <p><a href="https://www.usatoday.com/story/money/2020/05/19/pier-1-stores-closing-liquidation-coronavirus-covid-19/5221531002/">Pier 1 Imports</a> announced in January that it would be closing almost half of its locations; it filed for Chapter 11 bankruptcy protection the following month. As businesses closed during the coronavirus pandemic, the retailer in May shifted gears and announced the additional economic strain had prevented the sale of the company and Pier 1 Imports would instead close all of its stores.</p>

Overview

  • Federal regulators filed the case this week in the Southern District of Florida against REV co-founders Alex Mehr and Tai Lopez, as well as COO Maya Rose Burkenroad.
  • The complaint says the trio raised money from 2020 to 2022 by touting portfolio brands as cash-flow strong and promising funds would stay within the named company, even though none of the brands were profitable.
  • The SEC alleges about $112 million was raised through fraudulent offerings tied to eight brands, while REV and affiliates took in more than $230 million from roughly 660 investors overall.
  • At least $5.9 million in investor payouts were Ponzi-like distributions funded by other investors, and approximately $16.1 million was diverted for personal use, according to the filing.
  • The suit seeks disgorgement, civil penalties, and leadership bans; the brands tied to the scheme were transferred to Omni Retail after REV’s 2023 default and bankruptcy processes.