SEC v. Frank Lynold Mercado; and Tiger Wolf Capital, LLC, No. LR-26012, Western District of North Carolina (May 30, 2024) — Press Release

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26012 / May 30, 2024 Securities and Exchange Commission v. Frank Lynold Mercado and Tiger Wolf Capital, LLC, Civil Action No. 3:24-cv-00514 (W.D. N.C. filed May 30, 2024) SEC Charges North Carolina Man and His Advisory Firm With Running Ponzi Scheme Victimizing More Than 100 Clients The Securities and Exchange Commission has charged Charlotte, North Carolina resident Frank Lynold Mercado and the unregistered advisory firm that he controlled, Tiger Wolf Capital, LLC, with defrauding more than 100 investors through a Ponzi scheme. According to the SEC’s complaint, between August 2019 and February 2023, Mercado and Tiger Wolf made unregistered offerings of securities, raising more than $1.4 million from over 100 individual investors and advisory clients. The complaint alleges that Tiger Wolf and Mercado falsely claimed, among other things, that clients were receiving a “50%+” return on investment and touted an “[u]ncompromising focus on risk management.” In reality, Mercado, who had no prior experience in the securities industry, and Tiger Wolf did not invest the majority of client funds in Tiger Wolf’s offerings and instead used money from new investors to make payments to existing investors. The SEC also alleges that Mercado spent investor funds on personal expenses and created fake account statements to create the illusion of profits. The complaint, filed May 30, 2024, in the U.S. District Court for the Western District of North Carolina, charges Mercado and Tiger Wolf with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), (2) and (4) of the Investment Advisers Act of 1940, and Rule 206(4)-8 thereunder. Without denying the allegations, Mercado and Tiger Wolf each consented to the entry of an order, subject to court approval, permanently enjoining them from violating the charged provisions and agreed to pay a to-be-determined amount of disgorgement, prejudgment interest, and civil money penalties. Mercado also consented to a permanent bar from serving as officer or director of a public company and an injunction that permanently bars him from participating in the issuance, purchase, offer, or sale of securities, except in his personal account. The SEC’s investigation was conducted by Brian M. Basinger and Richard V. Rodriguez of the Atlanta Regional Office and supervised by Stephen E. Donahue and Justin C. Jeffries. The litigation will be led by Edward G. Sullivan, with the assistance of Mr. Basinger, and will be supervised by M. Graham Loomis. SEC Complaint

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 26012 / May 30, 2024 Securities and Exchange Commission v. Frank Lynold Mercado and Tiger Wolf Capital, LLC, Civil Action No. 3:24-cv-00514 (W.D. N.C. filed May 30, 2024) SEC Charges North Carolina Man and His Advisory Firm With Running Ponzi Scheme Victimizing More Than 100 Clients The Securities and Exchange Commission has charged Charlotte, North Carolina resident Frank Lynold Mercado and the unregistered advisory firm that he controlled, Tiger Wolf Capital, LLC, with defrauding more than 100 investors through a Ponzi scheme. According to the SEC’s complaint, between August 2019 and February 2023, Mercado and Tiger Wolf made unregistered offerings of securities, raising more than $1.4 million from over 100 individual investors and advisory clients. The complaint alleges that Tiger Wolf and Mercado falsely claimed, among other things, that clients were receiving a “50%+” return on investment and touted an “[u]ncompromising focus on risk management.” In reality, Mercado, who had no prior experience in the securities industry, and Tiger Wolf did not invest the majority of client funds in Tiger Wolf’s offerings and instead used money from new investors to make payments to existing investors. The SEC also alleges that Mercado spent investor funds on personal expenses and created fake account statements to create the illusion of profits. The complaint, filed May 30, 2024, in the U.S. District Court for the Western District of North Carolina, charges Mercado and Tiger Wolf with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), (2) and (4) of the Investment Advisers Act of 1940, and Rule 206(4)-8 thereunder. Without denying the allegations, Mercado and Tiger Wolf each consented to the entry of an order, subject to court approval, permanently enjoining them from violating the charged provisions and agreed to pay a to-be-determined amount of disgorgement, prejudgment interest, and civil money penalties. Mercado also consented to a permanent bar from serving as officer or director of a public company and an injunction that permanently bars him from participating in the issuance, purchase, offer, or sale of securities, except in his personal account. The SEC’s investigation was conducted by Brian M. Basinger and Richard V. Rodriguez of the Atlanta Regional Office and supervised by Stephen E. Donahue and Justin C. Jeffries. The litigation will be led by Edward G. Sullivan, with the assistance of Mr. Basinger, and will be supervised by M. Graham Loomis. SEC Complaint