USA Capital suspends investments in fund

Wednesday, Sept. 28, 2005 | 10:56 a.m.

An investment fund operated by Las Vegas-based USA Capital has suspended sales of the company's membership units.

The move to suspend investments in the USA Capital First Trust Deed Fund LLC was announced in filings with the Securities and Exchange Commission. As a result of the suspension, "all distributions will be made in cash in accordance with the company's operating agreement, and members will not be permitted to reinvest their distributions for the purchase of additional membership units."

Separate SEC filings indicate there are more than 1,000 membership units outstanding in the fund, which has $65.7 million in assets.

In February, the SEC began a regulatory examination of the operations of USA Securities LLC, the principal placement agent for the fund's public offering of its membership units, the company said in its most recent quarterly report.

"As a result of the examination, by letter to USA Securities dated July 1, 2005, the SEC advised USA Securities of the need for certain revisions to its practices and procedures concerning record keeping, retrieval of records and supervisory systems," the quarterly report said.

"In addition, the SEC advised USA Securities that the SEC was reviewing other related matters, including possible violations of the antifraud, registration, reporting, transfer agent, broker-dealer and other provisions of federal securities laws by the fund and certain affiliates of the Fund," the filing said.