2021 [work] — Ferrum Capital Lawsuit

: A San Antonio-based financial advisor who collaborated with Ferrum. She pleaded guilty in March 2026 to federal charges, including wire fraud and aggravated identity theft.

The refers to a series of legal actions that began surfacing around 2021, eventually exposing a massive $67 million to $100 million Ponzi scheme orchestrated by Lubbock and San Antonio-based financial advisors . The scheme primarily targeted elderly retirees through promissory notes issued by entities known as Ferrum Capital LLC, Ferrum II, Ferrum III, and Ferrum IV. Background: The "Lending Program" Strategy

Investors were told their money was "secured by collateral," a claim that was allegedly false.

: A Wisconsin investor suffering from cognitive difficulties was allegedly convinced to invest a total of $2 million into Ferrum Capital. May 2021 : Brooklynn Chandler Willy ferrum capital lawsuit 2021

: Lawsuits claim Ferrum induced hundreds of investors to provide capital under the guise of funding promissory notes for debt collection through Collins Asset Group Indictments and Criminal Case : Federal prosecutors indicted securities fraud wire fraud after an FBI and IRS investigation found that over $83 million was funneled through Ferrum entities. Bankruptcy Filings Michael Cox filed for bankruptcy in 2024, reporting $59 million in debt

Specifically, the lawsuit alleged that Ferrum Capital had overstated the returns on several of its investment funds, and that the company had failed to disclose significant risks associated with these investments. The plaintiffs also alleged that Ferrum Capital had engaged in a practice known as "churning," in which the company would rapidly buy and sell securities in order to generate commissions, rather than to benefit the investors.

The lawsuits and subsequent federal indictments claim the following: : A San Antonio-based financial advisor who collaborated

The Ferrum Capital lawsuit serves as a reminder of the importance of transparency, disclosure, and due diligence in the financial services industry. As the case continues to unfold, it is essential for investors and regulatory bodies to closely monitor the proceedings and take necessary steps to protect their interests.

The Ferrum Capital lawsuit, filed in 2021, has garnered significant attention in the financial and legal communities. This review aims to provide an in-depth analysis of the lawsuit, covering its background, allegations, key players, and current status.

One of the most high-profile instances involved (now known as Kustom Entertainment). Ferrum had provided financing to Porter stalled, a guitar and equipment retailer. When Porter stalled attempted to go public via a reverse merger, the process became mired in regulatory delays and financial inconsistencies. May 2021 : Brooklynn Chandler Willy : Lawsuits

While the lawsuits primarily targeted the investor-lender relationship, the ripple effects hit real estate borrowers hard.

The defendant claimed Ferrum had secretly structured the deal to trigger a default artificially. According to court filings, Ferrum allegedly refused to accept a timely partial payment (over $5 million) because accepting it would have reset the statute of limitations on other claims. The defendant argued this was a “gotcha” tactic designed to seize control of the entire portfolio.

The lawsuits that began or were rooted in activities from 2021 led to several landmark rulings:

The lawsuit filed in 2021 provides a critical, early glimpse into the specific tactics used. A lawsuit filed by a plaintiff from Wisconsin, which was tracked down by the KCBD Investigates Team, details two significant investments made that year.

Ferrum wasn't a bank; it was a private credit fund. The case highlighted how alternative lenders can use legal engineering (breakup fees) to generate yield in a zero-close scenario. Regulators have since flagged this as a potential systemic risk in private credit.