“A federal appeals court has rebuffed a bid by the four managers of a bankrupt Arizona company to escape paying a $3.7 million verdict for securities fraud. . . . The judges also called it ‘undisputed’ that all four knew they were committing fraud by lying to investors about the nature of what they were getting. . . . The Arizona Corporation Commission earlier this year ordered Tom Hirsch, Harish Shah, and Howard and Berta ‘Bunny’ Walder, along with an affiliated entity, to pay $189.8 million in restitution and more than $4.6 million in administrative penalties for defrauding investors.”

The lawsuit arises from $190 million in investments made by an Arizona company called Radical Bunny, LLC, into a failed company called Mortgages, Ltd.

Bottom Line:  If you offer to sell or sell a security, you must comply with federal and state securities laws or a court will find you liable to repay the losses suffered by the investors.  See an experienced securities lawyer before you offer or sell a security such as stock or membership interests in a limited liability company when people are investing substantial amounts of money.