Update from the Philadelphia Inquirer about the Par Funding case but no deal yet on when investors will get their money back.
From the article:
The "Ponzi" designation is meant to make it easier to pay Par investors who lost it all.
Par Funding operated from 2012 to 2019 “as a Ponzi scheme,” diverting new investors’ money to fool old investors and wrongly enriching its owners, the court-appointed receiver for the defunct Philadelphia cash-advance lender said in a court filing Monday. The motion is designed to speed partial payments to around 1,700 investors who are owed a total of $228 million.
During the four years of civil proceedings in the fraud case, the U.S. Securities & Exchange Commission had mostly avoided the Ponzi label, which refers to a type of investment fraud that offers high returns to early investors from proceeds from later investors.
By recognizing Par as a Ponzi scheme, receiver Ryan Stumphauzer said in a motion before U.S. District Court Judge Rodolfo Ruiz, precedent would allow the court to distribute Par assets to investors, minus payments they received when Par was yielding early investors more than 10% in yearly interest. Under this proposal, a few investors wouldn’t be paid anything because they got more out of Par than they put in.
Ruiz has said investors have waited a long time for their money. Stumphauzer’s latest motion offers a road map for paying investors and some others, while denying other claims on what’s left of Par’s assets. If the judge approves, the receiver will follow up with a plan to send investors an “initial distribution” of what they are owed.
Full article: