The U.S. Securities & Exchange Commission (SEC) has banned a New Jersey man who pled guilty to orchestrating a $145 million debt portfolio scheme.

Jonathan Rosenberg of West Orange, New Jersey borrowed money from a hedge fund to purchase medical debt that an accomplice would batch into portfolios and sell to investors, according to a 2013 indictment. Rosenberg and his accomplice were accused of setting two prices – one that was given to lenders, and a higher price for which they sold the debt.

Rosenberg allegedly received 5% of the price paid to purchase each debt portfolio, although it was alleged that they wouldn’t be paid until investors received their full return of their principal plus interest.

Rosenberg pled guilty in January and has agreed to make restitution “not to exceed $148,251,859,” according to his plea letter. According to the SEC, Rosenberg acted as an unregistered investment advisor, telling investors when to sell their investments.

Investors were led to believe that they were selling at a profit to third-party purchasers, and reinvested to purchase even greater sums in more expensive debt portfolios. Instead the funds from new investments were used to pay old obligations in order to keep the scheme from unraveling, in true Ponzi-scheme fashion.

Did you invest with Jonathan Rosenberg?

The attorneys at Dimond Kaplan & Rothstein, P.A. have recovered more than $100 million from banks and brokerage firms for their wrongful actions. If you invested with or relied on the advice of Jonathan Rosenberg, you may have certain legal rights that require your immediate attention. Contact us to schedule an appointment or consultation today.

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