The SEC alleges Agridime used at least $58 million in investor funds since December 2022 to pay returns on existing investors instead of buying, feeding and marketing cattle. Agridime was not buying enough cattle to fulfill its contracts or obligations, the SEC stated, “and as a result, Agridime has only been able to return principal and pay promised returns by making Ponzi payments.”
The SEC laid out Agridime’s cattle contracts, investments and liabilities, stating that as of Sept. 5, 2023, Agridime had cattle contracts requiring it to pay investors more than $123 million in principal and another $24 million in guaranteed profits. That was despite only having potentially $1.5 million in the checking account.
The states of Arizona and North Dakota earlier this year had each filed cease-and-desist orders against Agridime, but the company continued to sell its cattle contracts in those states, including $9 million in contracts in North Dakota and $1 million in Arizona. An Agridime salesman admitted under oath in October that he is still selling cattle contracts in Arizona, the SEC stated.
According to the SEC, Agridime typically solicited investors on its website, as well as social media. The SEC alleges the contracts operated like unregistered securities, which is…