The Securities and Exchange Commission today charged Florida-based real estate developer James M. Rudnick with fraud in connection with the sale of promissory notes of two entities he controlled.

The Commission's complaint alleges that between 2013 and 2018, Rudnick, through his entities Southeast Lot Acquisitions, LLC and Mary A II, LLC, sold approximately $16.7 million in promissory notes to more than 80 investors. According to the complaint, Rudnick relied on Dana J. Bradley and Marlin S. Hershey to prepare the offering documents and conduct the offerings. Rudnick allegedly failed to adequately review the offering materials, which stated that no commissions would be paid to employees or unregistered broker-dealers, when, in truth, Rudnick, Southeast Lot, and Mary A paid Hershey and Bradley-both of whom were listed as employees and neither of whom was a registered broker-dealer-and affiliated entities approximately $2.1 million in commissions. The Commission previously charged Bradley and Hershey with conducting several other offering frauds and operating as unregistered brokers with respect to those offerings and with respect to Rudnick's offering.

The SEC's complaint, filed in the U.S. District Court for the Western District of North Carolina, charges Rudnick with violating the antifraud provisions of Sections 17(a)(2) and (3) of the Securities Act of 1933. Without admitting or denying the SEC's allegations, Rudnick agreed to be permanently enjoined from violating the charged provisions and to pay an $80,000 civil penalty. The settlement is subject to court approval.

The SEC's investigation was conducted by Mark Eric Harrison in the SEC's Atlanta Regional Office and supervised by Thomas B. Bosch.