Phoenix — A former real estate broker, Richard D. Saba, Jr., and his company, Saba Tooth Tiger, was ordered to pay $1,362,099 in restitution and a $50,000 administrative penalty for committing securities fraud.
The Arizona Corporation Commission found Mr. Saba was the sole, managing member of Saba Tooth Tiger, LLC, which was doing business as Saba Investments out of his home, but was not registered to offer or sell securities in Arizona. The Commission found Mr. Saba and his home-based company sold unregistered promissory notes and investment contracts to 31 investors, most of whom were Arizona residents.
The Corporation Commission found Mr. Saba and his company represented to investors that they were raising capital to purchase an inventory of “collectible” items for the purpose of selling these items online for a profit. However, the Commission found Mr. Saba and his company failed to disclose to several investors that a substantial portion of their investment funds would be used to pay commissions; that Mr. Saba had incurred a significant amount of debt that jeopardized the investors’ investments; and that Mr. Saba’s company and online business were not profitable for at least two years.
The Commissioners also found Mr. Saba and his company paid undisclosed commissions to a registered securities salesman and licensed investment adviser representative who was sanctioned by the Corporation Commission in September 2020 for offering and selling to his clients the unregistered promissory notes and investment contracts issued by Mr. Saba and his company.