MARYLAND (WBFF) — Attorney General Anthony Brown announced that his Securities Division reached a $562,000 settlement with two Maryland companies for the unregistered offer and sale of securities between 2019 and 2024.
The settlement involves Otis H. Jackson of Davidson, Maryland, and his two companies, Social Solutions, LLC (Social Solutions) and SITO Capital, LLC (SITO Capital), officials reported.
Jackson is now required to pay $562,000 in restitution to 17 investors who purchased securities from him in the form of promissory notes.
“Marylanders deserve to invest with confidence, free from fraud and deception,” the Attorney General stated in a press release. “My Office will continue to pursue unregistered securities schemes and ensure that those harmed receive the restitution they are owed.”
In the Consent Order, officials reported that Jackson neither admitted nor denied soliciting investors through his two companies for what he referred to as a “Social and Economic Development Program.”
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This program claimed to focus on developing affordable housing in Park Heights, Baltimore City.
In his promotional materials, Jackson asserted that he had relationships with non-profit organizations, private equity lenders, and local government to implement this program, which investors were asked to help fund.
He issued promissory notes to investors that promised repayment of their principal investments and high rates of return.
The notes outlined the intended use of investor funds for various business purposes, such as renovating specific properties or for broader uses like “administrative purposes” or for the “acquisition and renovation of houses,” according to officials.
However, instead of using these funds for the promised program, Jackson deposited investor money into accounts for his companies and used it for personal expenses, including mortgage payments on his home, dining out, transportation, and large cash transfers to his personal accounts.
Although Jackson occasionally used new investor funds to repay earlier investors, most did not receive any return on their investment or repayment of their principal.
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Authorities reported that he failed to disclose any risks to investors, including the possibility of losing their investment, and instead focused on the profits they could earn.
Furthermore, officials said Jackson did not inform investors that many of the properties he claimed to own were burdened with significant tax and mortgage debts, and, in at least one case, a property had been sold at auction after Jackson failed to pay its taxes.
Jackson and both his companies have been barred from engaging in the securities and investment advisory business in the State of Maryland and have been ordered to pay a $562,000 civil penalty for violations of the Maryland Securities Act, which will be allocated as restitution to the affected investors.
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