Texas’ attorney general says a firm with a history of litigation against investors is suing more than 200 investors, alleging that they are “deceptive” and “unreasonably misleading” about how the Texas midland funding company has been handling their money.
The attorney general’s office said Thursday it filed a lawsuit with the U.S. Securities and Exchange Commission alleging that Texas Midland Financial is a scam that defrauds investors in Texas funds.
“The false and deceptive representations of potential losses to investors is common in the industry,” David Weiler, the attorney general, said in a statement.
“We expect to prevail in this matter.”
The lawsuit was filed in U.K. court on behalf of a Texas investor, who is suing Midland and another company.
Weiler said in his statement that he filed the lawsuit in the U: because investors who are in trouble with the state of Texas should have access to the appropriate government agencies.
Weiler said the investor, a Texas resident who is seeking $3.4 million in damages, was contacted by the attorney on March 20, 2017, and told that he should contact a company in the midland financing industry called Midland Asset Management.
The investor told the attorney that Midland has a history with the investor and said he had contacted several people about the situation.
Weiser said that after the investor called Midlands and the attorney was told that the investor was an investor and the company was a scam, the investor told a Midland representative that the client had lost more than $2 million on a home in Austin.
The statement said the attorney asked the Midland rep about a possible payout.
“This customer was told the client was an individual and not a real estate broker, but the client told the Midlands representative that he had lost money on a real home in Dallas,” Weiler’s statement said.
Midland told the investor that his information was inaccurate, but Midland said it was “not in the business of selling the client’s information.”
The statement also said that the company does not “take any responsibility for any loss or loss of money.”
The Texas attorney general said that a number of investors in midland funds have also filed complaints against the company.
“These claims are false, misleading, and without merit and are likely to be sustained,” Weiser’s statement says.
Midlander was established in 1999 to provide home loans to individuals and families in the Dallas-Fort Worth metropolitan area, according to the Texas Attorney General’s Office.
The Texas Midlander Fund was incorporated in 2012 by Midland Funds, a Dallas-based company that has since moved to the San Antonio office of the firm.
A representative from the Texas attorney office declined to comment.
Midlanders attorneys did not immediately respond to a request for comment.
The lawsuit filed Thursday accuses Midland of “defrauding” investors in a number and amounts that it claims are large enough to warrant a class action.
It is seeking more than 2.5 million in compensatory damages and $1.2 million in punitive damages for the plaintiffs.
The attorneys have not provided any further details about how much money the investors have lost.