The Securities and Exchange Commission filed fraud charges against Coral Springs, Florida resident Larry B. Brodman and several entities he controls for misappropriating and misusing millions of dollars of investor proceeds raised in various fraudulent and unregistered securities offerings. The Commission also charged Lake Worth, Florida resident Anthony Nicolosi for illegally acting as an unregistered broker while offering and selling the securities involved.

According to the SEC's complaint, which was filed in the U.S. District Court for the Southern District of Florida, from January 2016 through September 2020, Brodman, his company Property Income Investors LLC, and his various other entities raised approximately $9.06 million from about 156 investors through a series of unregistered securities offerings. The complaint alleges that Brodman and his companies told investors that offering proceeds would be used to purchase turnkey, multifamily properties located in South Florida, which would then be renovated and rented to tenants. As alleged in the complaint, however, Brodman misappropriated approximately $1.12 million in investor funds for his own personal use. In addition, Brodman and his companies allegedly misused investor money by paying sales commissions totaling about $1.2 million to unregistered sales agents, despite telling investors that commissions would only be paid to "licensed broker/dealers," and by using investor funds to pay a portion of the purported profits that were distributed to investors. The complaint alleges that Nicolosi, the companies' top producing sales agent, offered and sold the unregistered securities despite the fact that he was not a registered broker.

The SEC's complaint charges Brodman and his companies with violating the antifraud and offering registration provisions of the federal securities laws, and Nicolosi with violating the offering registration and broker-dealer registration provisions of the federal securities laws. Specifically, the complaint alleges that Brodman and his companies violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and that Nicolosi violated Sections 5(a) and 5(c) of the Securities Act and Section 15(a)(1) of the Exchange Act. The defendants have consented to bifurcated settlements, agreeing to be permanently enjoined from violations of the charged provisions with monetary relief to be determined by the court at a later date. In addition, Brodman and his companies have consented to the appointment of a receiver to take control of the real properties purchased with investor funds. The settlements are subject to court approval.

The SEC's investigation was conducted by David Staubitz, Mark Dee, and Crystal Ivory in the Miami Regional Office, and was supervised by Chedly C. Dumornay and Glenn S. Gordon. The SEC's litigation will be led by Alice Sum and supervised by Andrew Schiff. The SEC acknowledges the assistance of the Florida Office of Financial Regulation.