SEC Charges Real Estate Investment Trust Headquartered in Tampa, Florida, and Founders with Fraud in Alleged $152 Million Scheme

On July 29, 2026, the Securities and Exchange Commission filed charges against RAD Diversified REIT, Inc. (“RADD”), a real estate investment trust (“REIT”), and its founders Brandon “Dutch” Mendenhall and Amy Vaughn, for raising at least $152 million from more than 5,500 retail investors nationwide through an alleged fraudulent real estate investment scheme in which Mendenhall and Vaughn collectively misappropriated nearly $5 million of investor funds.

According to the SEC’s complaint, filed in the U.S. District Court for the Middle District of Florida, from November 2019 through March 2024, the defendants systematically deceived investors about RADD’s profitability, stock valuation practices, and liquidity, through an extensive marketing campaign using unregistered sales agents and high-pressure tactics, and invoking Christian values and patriotism to gain investor trust. The complaint alleges that the defendants falsely claimed that RADD was a profitable REIT and that “zero investors have ever lost money on their investment,” when in reality, RADD suffered millions of dollars in annual losses. The complaint also alleges that the defendants claimed RADD’s ever-increasing stock price was based on independent appraisals or valuations of the REIT’s properties and would be regularly updated; however, the properties were not independently valued, and defendants never updated RADD’s stock beyond July 2023, despite widespread property foreclosures and internal findings showing the stock price was significantly overstated. The defendants allegedly assured investors of liquidity, while routinely denying or ignoring redemption requests, which RADD ultimately froze in February 2024, later filing for bankruptcy in March 2026. Moreover, the complaint alleges that the defendants diverted approximately $54 million of investor funds to relief defendant The Seminar Solution, LLC (“TSS”), an entity owned by Mendenhall and Vaughn, who then misappropriated millions for personal expenses, including IRS taxes, private jet charters, luxury goods, and recreational activities.

by SEC Litigation Release

Jamie McDonald Assumes Role As United States Attorney For The Southern District Of New York

Jamie McDonald has assumed the role of United States Attorney for the Southern District of New York. Earlier today, Judge Laura Taylor Swain, Chief District Judge for the Southern District of New York, informed the Office that the Court has appointed Mr. McDonald to serve as United States Attorney for the Southern District of New York, pursuant to 28 U.S.C. § 546(d), upon U.S. Attorney Jay Clayton’s resignation. Yesterday, Mr. Clayton was confirmed by the Senate to serve as Director of National Intelligence. Mr. Clayton tendered his resignation as U.S. Attorney, effective earlier today. Mr. McDonald was sworn in as the U.S. Attorney by Chief Judge Swain.

Sean S. Buckley will continue in his role as Deputy United States Attorney, Amanda Houle will continue in her role as Chief of the Criminal Division, and Jeff Oestericher will continue in his role as Chief of the Civil Division as contemplated in the transition announcement of July 8, 2026.

by DOJ Press Releases

Federal Grand Jury in Chicago Indicts Film Producer for Allegedly Defrauding Clients of More Than $100 Million

A federal grand jury in Chicago has indicted a film producer for allegedly defrauding clients of more than $100 million by soliciting them to invest in purported film and entertainment projects.

JASON CLOTH, 60, of Beverly Hills, Calif., was charged with seven counts of wire fraud in an indictment unsealed Tuesday in U.S. District Court in Chicago. Cloth was arrested on Tuesday in Los Angeles, Calif. He made his initial court appearance on Tuesday in U.S. District Court in Los Angeles.

According to the indictment, Cloth operated Canadien-based Creative Wealth Media Finance Corp. From 2019 to 2026, Cloth solicited various clients, including an investment advisor in Illinois, to invest in purported film and entertainment projects or to fund a gaming entertainment investment platform. Cloth fraudulently obtained more than $100 million from the Illinois investment advisor, the advisor’s clients, and other investors based on false representations about the performance and value of their investments, the indictment states. Cloth knew at the time of the investments that he would use the money for other purposes, including the development of a real estate project in Canada, the indictment states.

Cloth allegedly engaged in a Ponzi scheme by using some investor funds to repay prior investors. The indictment seeks forfeiture from Cloth in the amount of at least $12.25 million for the projects identified in the indictment.

by DOJ Press Releases

Securities Class Actions: Filing & Settlement Numbers Are Outpacing Recent Years

by TheCorporateCounsel.net

More on “Crypto: Is the CLARITY Act Doomed?”

by TheCorporateCounsel.net

Private Investors Pick Up Slack for Plummeting SEC Enforcement

Given the SEC’s declining enforcement efforts, private enforcement through securities class actions serves an increasingly important role in protecting investors and deterring misconduct. Over a decade ago, academic research concluded that “private plaintiffs’ attorneys, if anything, provide greater deterrence against more serious securities law violations compared with the SEC.”

Empirical data supports that conclusion. Recoveries in private securities litigation have consistently exceeded the SEC’s distributions to investors. From 2019 to 2025, SEC investor distributions have averaged $685 million annually, while private securities class action settlements have recovered an average of $3.6 billion annually before accounting for attorneys’ fees. That means recoveries in private securities class actions have been, on average, 5.2 times as large as the SEC’s distributions to investors.

Significantly, this ratio has recently increased, as shown below, reaching 11.5:1 in 2025. Put another way, private securities litigation recovered $11.5 million for every $1 million the SEC distributed to investors. Given the SEC’s declining enforcement efforts and the lag between enforcement actions and investor distributions, this ratio is likely to continue increasing in 2026.

by Bloomberg Law

Wachtell Chief’s Sudden Exit Has Rival Big Law Poachers Circling

The surprise move by Wachtell Lipton leader William Savitt to bolt with five other partners shows how the 60-year-old Wall Street powerhouse is now exposed to the hyper-competitive legal market.

Savitt, a veteran litigator and Wachtell co-chair, is joining Gibson Dunn & Crutcher, the latter firm announced Tuesday. He was named Wachtell co-chair less than three years ago and scored massive litigation wins in a three-decade career at the firm.

“This may be the most high-profile move that I’ve seen,” said Todd Merkin, a New York-based recruiter and the executive director of Wegman Partners. “If he’s not untouchable, then who is? If he’s capable of making the move, then who’s safe?”

by Bloomberg Law

Binance.US Wants to Join Prediction Markets Race With CFTC Stamp

Binance.US is planning to apply for a license with the Commodity Futures Trading Commission that would help it start its own prediction market, the company’s chief executive officer said at a conference on Wednesday.

Binance.US, which is separate from the larger global exchange Binance Holdings Ltd., plans to apply for a designated contract market license next month, Chief Executive Officer Steven Gregory said during the Rare Evo conference in Las Vegas, according to a spokesperson.

by Bloomberg