Is Scuderi Group, LLC a pyramid fraud?


Quick Answer

Scuderi Group, LLC is not a pyramid fraud, but the U.S. Securities and Exchange Commission found in 2013 that the company had misled its investors about how it intended to use $80 million raised between 2004 and 2012. The SEC imposed a $100,000 fine on the company president.

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Full Answer

During the eight years, President and CEO Salvatore Scuderi and the Scuderi Group presented private placement memoranda to investors that stated the funds invested were for working capital and general corporate purposes, notes the SEC. Those statements were materially misleading, since more than $20 million of the funds were used for purposes including personal family expenses and bonuses, undocumented loans and insurance policies. The expenditures were not for corporate purposes. In addition to the fine, the SEC ordered the company to stop its conduct and to make proper disclosures to their investors.

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