Falcons I, Llc

Allegations: OPERATING AS A BROKER-DEALER WITHOUT REGISTERING WITH THE SEC Status: Final Sanction Detail: SANCTIONS AGAINST ANGEL OAK CAPITAL PARTNERS, LLC INCLUDED CEASE AND DESIST, CENSURE, DISGORGEMENT OF $3,054,288, PREJUDGMENT INTEREST OF $237,082, AND A CIVIL MONEY PENALTY OF $375,000, FOR A TOTAL AMOUNT OF $3,666,370. SANCTIONS AGAINST MR. PRABHU INCLUDED CEASE AND DESIST, AND A CIVIL MONEY PENALTY OF $40,000. Summary: ON FEBRUARY 16, 2017, THE U.S. SECURITIES AND EXCHANGE COMMISSION (THE "SEC" OR "COMMISSION") ACCEPTED AN OFFER OF SETTLEMENT FROM ANGEL OAK CAPITAL PARTNERS, LLC ("AOCP") AND ENTERED AN ADMINISTRATIVE ORDER AGAINST IT. THE ORDER, WHILE RECOGNIZING THAT AOCP DID NOT ADMIT OR DENY ANY FINDINGS, CONCLUDED THAT AOCP OPERATED AS A BROKER-DEALER FROM MARCH 2010 UNTIL OCTOBER 2014 WITHOUT REGISTERING WITH THE COMMISSION. THE SEC FOUND THAT AOCP ENTERED INTO AN AGREEMENT WITH PERAZA CAPITAL & INVESTMENT, LLC ("PERAZA") IN LATE 2009 FOR THE PURPOSE OF CONDUCTING A SECURITIES BUSINESS, WITHOUT REGISTERING AS A BROKER-DEALER. TRADERS EMPLOYED BY AOCP IN ITS SECURITIES BUSINESS WERE REGISTERED WITH THE FINANCIAL INDUSTRY REGULATORY AUTHORITY ("FINRA") AS REGISTERED REPRESENTATIVES OF PERAZA, AND AOCP AND PERAZA SPLIT THE COMMISSION REVENUE GENERATED AS A RESULT OF AOCP TRADING ACTIVITIES. THE SEC DETERMINED THAT AOCP AND ITS OWNERS OR EMPLOYEES-WHO WERE NOT REGISTERED AS BROKER-DEALERS OR ASSOCIATED WITH A REGISTERED BROKER-DEALER-WERE INVOLVED IN THE OPERATIONS OF THE SECURITIES BUSINESS AND MADE KEY DECISIONS REGARDING THE BUSINESS. AS REFLECTED IN THE ORDER, THE COMMISSION ACCEPTED AOCP'S OFFER TO DISGORGE PROFITS RECEIVED FROM THE OPERATION OF $3,054,288 PLUS INTEREST, TO PAY A PENALTY OF $375,000 AND TO CEASE AND DESIST FROM THAT ACTIVITY. THE SEC FURTHER ACCEPTED AN OFFER OF SETTLEMENT FROM SREENIWAS PRABHU, AN INDIRECT OWNER OF FALCONS I, LLC, AND ANOTHER EMPLOYEE OF AN AFFILIATE, BASED ON THE ALLEGATIONS OF THE SEC THAT THEY CAUSED AOCP TO OPERATE AS AN UNREGISTERED BROKER DEALER. THEY BOTH AGREED TO A CEASE AND DESIST ORDER AND AN ADMINISTRATIVE PENALTY OF $40,000 EACH.