A Massapequa, N.Y., financial advisory firm and two of its executives have been charged with securities fraud by the Securities and Exchange Commission for their involvement in a $500 million unregistered fraudulent offering of securities, the SEC announced recently.

The commission charged A.G. Morgan Financial Advisors, based in Massapequa; the firm’s owner, Vincent J. Camarda of Amityville, N.Y.; and the firm’s chief compliance officer, James McArthur of Mount Sinai, N.Y., with unlawfully offering and selling securities through a fraudulent offering related to Par Funding, a lending company based in Palm Beach Gardens, Fla.

The commission also said that A.G. Morgan and Camarda had solicited investments in Par Funding, also known as Complete Business Solutions Group, without revealing to clients they had borrowed money from the lending firm and had never fully repaid it, the SEC said.

Par Funding and its executives were the subjects of a 2020 commission complaint that said they operated a fraudulent scheme raising hundreds of millions of dollars from investors nationwide. A court-appointed receiver was assigned to oversee Par Funding in 2020.

According to the latest SEC complaint, Camarda, McArthur and A.G. Morgan Financial Advisors raised more than $75 million from more than 200 investors from at least August 2017 through July 2020 for Par Funding’s unregistered securities offering. Camarda and McArthur collectively received more than $7 million in compensation from Par Funding for their sales of the unregistered securities. While soliciting investors, A.G. Morgan and Camarda violated their fiduciary duty to their clients by failing to disclose that they had a conflict of interest, the SEC said.

The commission’s complaint said that in December 2016, Camarda, on behalf of A.G. Morgan, borrowed $750,000 from Par Funding through so-called “merchant cash advance” transactions. Then Camarda and McArthur began soliciting investors to invest in promissory notes issued by Par Funding in its unregistered securities offering. The two men persuaded nearly a dozen investors to invest at least $2.6 million in Par Funding promissory notes.

The executives told investors that their investments were safe, while failing to disclose that A.G. Morgan was in debt to Par Funding and that Camarda was a guarantor on that debt. In 2017, the two men continued to solicit investments through in-person meetings and by phone to invest in Par Funding, asking the investors to purchase securities in the form of Par Funding promissory notes, which they said generally offered 12% interest with the return of principal after 12 months.

The SEC wants A.G. Morgan, Camarda and McArthur to disgorge any ill-gotten gains.