Michael V. Shustek, CEO of Las Vegas-based Vestin Mortgage LLC, has announced the resolution of a civil case brought against him and his company by the U.S. Securities and Exchange Commission (SEC) in 2021.
The SEC accused Shustek and Vestin Mortgage of defrauding investors when he allegedly “drained $29 million” from two real estate investment firms that he owner, claiming he sought to “funnel the money” into a third firm and later directed “a series of money-losing transactions in which the same six buildings were repeatedly re-sold, all to benefit himself” and one of his companies. The SEC said Shusetk and Vestin Mortgage violated the antifraud provisions of the Securities Act, Exchange Act and Advisers Act with their actions.
Shustek’s office issued a statement earlier today announcing that a settlement with the SEC.
“The SEC withdrew their false and totally unsupported claims that Mike Shustek and Vestin Mortgage LLC engaged in a $29 million fraud, admitting in court that ‘the Commission is withdrawing all scienter-based claims for relief’ and dismissing those false claims,” said Damon Elder, a spokesman for Shustek and his company. “In order to end this costly litigation and move on with his life, Mr. Shustek agreed to a standard ‘no admission, no denial’ settlement involving solely negligence-based claims that included a $300,000 fine, which was 1% of the SEC’s original exaggerated demands, and no disgorgement. Mr. Shustek always relied on attorneys at nationally recognized law firms with decades of experience to prepare the SEC filings that were the focus of the SEC’s allegations.”
The SEC has yet to issue a statement announcing the settlement.
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