Securities and Exchange Commission v. Boron Capital, LLC et al. was filed in the Northern District Court of Texas, Lubbock Division on June 14, 2022, claiming violations of several provisions of the Securities Act and Securities Exchange Act. Specifically, the SEC seeks permanent injunctive relief against all Defendants to prevent future violations of the federal securities laws, disgorgement of any ill-gotten gains, and civil penalties.
The SEC brought this action against Boron Capital, LLC (“Boron”), BC Holdings 2017, LLC (“BC Holdings”), United BNB Fund 2018, LLC (“United”), and Blake Robert Templeton (“Templeton”) (collectively, “Defendants”).
Templeton founded Boron, a Nevada limited liability company, in order to operate a real estate business, and Templeton serves as its CEO and managing member. Templeton also controls Defendants United and BC Holdings. United is a Texas limited liability company formed by Templeton that operates as an investment fund managed by Boron. BC Holdings is a Wyoming limited liability company wholly owned by Templeton through which he offered and sold promissory notes in connection with his real estate business. Templeton offered and sold securities to investors in three forms: (1) promissory notes issued by Defendant Boron; (2) investment units in Defendant United; and (3) promissory notes issued by Defendant BC Holdings.
From 2011 to February 2022, Templeton raised more than $18.7 million from investors in connection with various real estate developments: $8,827,073 through Boron, $5,450,00 through BC Holdings, and $4,467,240 through United. Specifically, Templeton offered and sold investment units in United by telling potential investors that United’s assets were secured by a mortgage position and a “UCC-1 Lien” on the Dallas Oasis, a ten-acre wedding venue in Red Oak, Texas. Similarly, Templeton offered and sold unregistered promissory notes issued by BC Holdings which were allegedly secured by a deed of trust on the Dallas Oasis.
However, in reality the SEC alleges Templeton used more than $14,000,000 of investor funds to purchase, develop, and operate the Dallas Oasis without securing the interests of United investors or BC Holdings noteholders. Further, the SEC alleges that promissory notes issued by BC Holdings and Boron were not registered and that no registration statement was filed in connection with the offering of membership units in United.
Additionally, the SEC alleges Templeton used investor funds to make Ponzi payments directly to earlier investors. Specifically, the SEC avers bank records reveal Ponzi-like transactions in which Defendant accounts paid earlier investors immediately upon receiving new investor money and used investor funds to pay expenses on unrelated real estate projects.
The complaint seeks permanent injunctive relief and disgorgement of ill-gotten gains and asserts three claims of relief against Defendants for violations of (i) Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b); (ii) Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a); and (iii) Sections 5(a) and (c) of the Securities Act, 15 U.S.C. § 77(e)(a) & (c).