Ferrum Capital Lawsuit 2021 File
In early 2024, a San Antonio judge placed Ferrum Capital under receivership and appointed John Patrick Lowe to manage its affairs, effectively removing Allen and Cox from control. Lowe has since worked aggressively to recover funds for victims, filing lawsuits against Ferrum's former investors under the Texas Uniform Fraudulent Transfer Act and targeting the companies that received Ferrum's money.
Joshua Allen and Mike Cox founded Ferrum Capital in 2017. Operating through multiple entities—including —the firm pitched a highly secure, high-yield opportunity to everyday investors.
What began as an attractive "safe, collateralized" alternative investment program eventually exposed a web of unregistered securities. It triggered a series of class-action lawsuits, federal indictments, and multi-million-dollar losses for hundreds of victims nationwide. The Origin and the 2021 Investment Surge ferrum capital lawsuit 2021
Co-conspirators claimed investor funds were being safely loaned via a master agreement to Austin-based Collins Asset Group (CAG) , a company tasked with purchasing distressed consumer debt for pennies on the dollar.
Attorneys representing Ferrum victims were not impressed. Ed Price described Collins as someone who "has done it a couple of times before in other states in different formats," referring to Collins' involvement with a previous scheme involving a company called Sonoqui. The mastermind behind Sonoqui, Daryl Bank, was arrested and sentenced to 35 years in prison in 2017 for what the U.S. Attorney's Office called "a nationwide investment fraud scheme". Collins Asset Group settled a separate lawsuit related to that scheme for $16 million in 2020. In early 2024, a San Antonio judge placed
In early 2021, as the world slowly emerged from the COVID-19 pandemic, an elderly Wisconsin investor placed $1 million into promissory notes issued by a Texas-based company called Ferrum Capital. The investor had recently suffered a stroke and was experiencing cognitive difficulties at the time of the transaction. A few months later, in June 2021, the same individual invested another $1 million — a decision assisted by his daughter, who held power of attorney. Neither the investor nor his family could have known that this would become the first domino to fall in what investigators would later call a "massive Ponzi fraud scheme" that ultimately consumed over $100 million from more than 400 victims.
Enter Ferrum Capital. According to the complaint filed in June 2021, Ferrum agreed to provide a massive $35 million PIPE investment. In exchange, Hightower made a critical concession: they agreed to pay Ferrum a if the merger failed to close by a specific drop-dead date. The Origin and the 2021 Investment Surge Co-conspirators
For the hundreds of victims involved, the aftermath has been a grueling ordeal. As the criminal proceedings continue, the focus for affected investors has shifted toward the bankruptcy process, proving their claims, and attempting to claw back whatever fraction of their defrauded funds can be salvaged.
This guide provides a comprehensive overview of the legal and criminal proceedings involving , a Lubbock-based company accused of orchestrating a Ponzi scheme that defrauded over 400 investors of more than $100 million . 1. Background: The 2021 Escalation
Disclaimer: This summary is based on public court records (Case No. 3:21-cv-02483, N.D. Cal.) and media reports from 2021-2022. Settlement terms are undisclosed. For legal advice on this or any case, consult an attorney.
Investors were told their money was "secured by collateral," a claim that was allegedly false.