brokerwatch

In 2013, Jesse Hill established JT Equity, in which he operated a private, pooled investment fund trading in options. Specifically, on behalf of JT Equity, Hill sold pooled investment agreements to 47 investors totaling $4 million. The pooled investment agreements were not registered for sale in Nebraska, nor was any claim of exemption filed in Nebraska. The agreements vested Hill with the sole authority to make trading decisions on behalf of the Fund.

JT Equity then entered into an agreement with Onyx Equity Traders. The Fund’s money was deposited into Onyx’s account at Interactive Brokers, where Hill had the authority to execute trades. Interactive Brokers represented to the Nebraska Department of Financial Services that it was unaware that JT Equity’s subaccount operated by Hill contained funds obtained from individual investors. When the firm learned this information, Interactive Brokers froze the account and prevented further trading.

In 2018, the State of Nebraska fined Hill $7,500 for selling these investment pooled agreements since they were unregistered, and neither JT Equity nor Hill was registered as an investment adviser in the state.

First SOJO Capital Group

First SOJO Capital Group is an insolvent financial advisory firm. It was based in Hickman, Nebraska.

First SOJO Capital Group managed two pooled investment vehicles:

• Outlier Fund I, LP
• Outlier Fund II, LP

Jesse Hill is the managing member and manager for First SOJO Capital Group. Hill was previously the subject of a Nebraska Department of Banking and Finance Consent Order in October 2018 for raising money and managing a pooled investment vehicle through an entity named JT Equity Trading without being registered as required by the Securities Act of Nebraska.

If you’ve invested with Jesse Hill through First SOJO Capital, Contact Us today by filling out a Contact Form or by calling 585-310-5140 to schedule a FREE Case Evaluation.

Jesse Hill and First SOJO Capital Group Sued by State of Nebraska

The Nebraska Department of Banking and Finance (NDBF) announced in December 2022 that the Office of the Attorney General filed a Complaint for Injunctive and Other Relief in the District Court of Lancaster County against Jesse Hill, First SOJO Capital Group, and related entities under the Securities Act of Nebraska.

The State requested that the Court enter a temporary restraining order freezing certain assets and enjoining Hill, First SOJO Capital Group, and the related entities from violating the Securities Act. The complaint also seeks the appointment of a receiver to protect investor assets, and rescission, restitution, or disgorgement as appropriate.

The Complaint also alleges that Hill executed false control agreements with financial institutions regarding Aaron Marshbanks’ and Marshbanks’ limited liability companies’ investments, which enabled Marshbanks to obtain loans and lines of credit from financial institutions. It also alleges Outlier Fund I, LP, and Outlier Fund II, LP incurred sizable trading losses in January and February 2022.

Despite these significant losses, the complaint alleges that Hill continued to misrepresent the value of the investments and has promised investors they will receive a return on their investment. The complaint alleges that Hill violated the prior Consent Order with NDBF, and that First SOJO Capital Group, LLC is currently insolvent and is in violation of other provisions of the Securities Act of Nebraska. Additionally, the complaint names JT Equity Trading, LLC, Outlier Fund I, LP, Outlier Fund II, LP, and Tabitha Hill, for purposes of obtaining relief.

Outlier Fund I and Outlier Fund II Managed by First SOJO Capital

According to SEC Edgar Database, Outlier Fund I, LP filed a Form D (Notice of Sales of Unregistered Securities) in November 2021. The minimum investment was $25,000. The total amount sold was $3,045,000. The filing stated that 13 investors had invested in the Outlier Fund I. Further, Outlier Fund II also filed a Form D in November 2021. The minimum investment was $25,000. The total amount sold was over $300,000. The filing stated that 2 investors had invested in the Outlier Fund II.

Charles Schwab Served as Custodian and Prime Broker for the Outlier Funds

According to First SOJO Capital’s latest Form ADV, Charles Schwab served as the prime broker for the Outlier Fund I and Outlier Fund II. Clearing firms like Charles Schwab have duties to supervise options trading in discretionary accounts managed by registered investment advisers on its platform, and may be liable in a FINRA arbitration for losses.

Jesse Hill First SOJO Capital Group Lawsuit

Peiffer Wolf has represented thousands of victims of investment fraud or broker misconduct, and we remain committed to fighting on behalf of investors. If you invested in the Outlier Funds through Jesse Hill and First SOJO Capital Group, Contact Us today by filling out a Contact Form or by calling 585-310-5140 to schedule a FREE Case Evaluation.

Peiffer Wolf is currently investigating claims against Jesse Hill, First SOJO Capital, and Charles Schwab in light of options trading losses occurring in the Outlier Funds. If you’ve invested with Jesse Hill through First SOJO Capital,  Contact Us  today by filling out a Contact Form or by calling 585-310-5140 to schedule a FREE Case Evaluation.