SoMoLend Holdings and its founder, Candace Klein, will have to wait until January for a state hearing that could determine the future of the Cincinnati start-up.
An order dated Oct. 9, but just released to the media Tuesday, continued the state hearings until Jan. 23 and Jan. 24 at the Ohio Department of Commerce’s Division of Securities office in Columbus.
The order says lawyers for both SoMoLend and Klein requested more time “to investigate and analyze allegations in this matter” and prepare for the hearing.
A Division of Securities notice dated June 14 accused Klein and SoMoLend of a laundry list of misdeeds: Selling unregistered securities, committing securities fraud by overstating SoMoLend’s early success and making fraudulent financial projections by exaggerating revenue projections during public presentations and statements.
Klein, who had been SoMoLend’s CEO, resigned from the company in August in an attempt to help save it.
State officials have stressed that the allegations are just that and that Klein and SoMoLend will be able to defend themselves at the state hearing.
There is no criminal penalty attached to the state’s allegations. If the state determines that the company and Klein are guilty of all the conduct alleged in the notice, regulators would require SoMoLend to stop those practices, a spokesman for the Department of Commerce told WCPO. But investors have said the practical effect would be to prevent SoMoLend from operating in Ohio, where the company was founded.
SoMoLend is an online platform designed to help small businesses get loans from groups of individual investors.