SEC v. FRANK LYNOLD MERCADO; and TIGER WOLF CAPITAL, LLC, No. 3:24-cv-00514, Southern District of Florida (May 30, 2024) — Complaint

1

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION

SECURITIES AND EXCHANGE
COMMISSION,

Plaintiff,   Civil Action File No:

v.
    __: _____-CV-________
FRANK LYNOLD MERCADO and TIGER
WOLF CAPITAL, LLC,

Defendants.

COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF

 The plaintiff, Securities and Exchange Commission (“Commission”), files this Complaint
and alleges the following:
SUMMARY
1. Between approximately August 13, 2019, and February 1, 2023 (the “Relevant
Period”), Frank Lynold Mercado (“Mercado”) and Tiger Wolf Capital, LLC (“Tiger Wolf”), an
unregistered investment adviser controlled by Mercado, offered and sold upwards of $1.4 million in
unregistered securities to more than 100 individual Tiger Wolf advisory clients.
2. Mercado and Tiger Wolf (collectively,  “Defendants”) led clients to believe they
were investing in funds that Mercado and Tiger Wolf managed and advised (collectively, the “Tiger
Wolf Funds”).
3. Defendants’ offering materials described Mercado as an experienced trader and
explained the firm would trade the assets of the Tiger Wolf Funds in which clients invested in

2

exchange for which clients would pay an annual management fee, as well as a performance fee if
certain profits were achieved.
4. Further, Tiger Wolf claimed that clients were receiving a “50%+” return on
investment, and that the firm oversaw client investments with an “[u]ncompromising focus on risk
management.”
5. These representations were false.  Of the more than $1.4 million the Defendants
raised from clients, Mercado and Tiger Wolf deposited only about $121,000 into the lone Tiger
Wolf Funds’ brokerage account identified by Commission staff.
6. Between August 2019 and July 2020, Mercado and Tiger Wolf used funds in the
brokerage account to trade securities, but did so unsuccessfully, generating net losses of
approximately $47,000.
7. Of the remaining funds raised from individual clients, Tiger Wolf and Mercado
made hundreds of thousands of dollars in Ponzi payments using funds from new clients to pay
existing clients, while Mercado also diverted more than $37,000 directly from Tiger Wolf’s bank
accounts to pay personal expenses – including shopping, travel and entertainment.
8. Separately, Defendants also made more than $1 million worth of deposits in
brokerage accounts that Mercado opened under the names of other individuals, including his
mother, but which he controlled.
9. Through trading in these accounts, Mercado sustained more than $250,000 of
additional net trading losses.
10. Mercado never disclosed any of his trading losses to Tiger Wolf clients until after he
filed for personal bankruptcy in December 2022.  Instead, during most of the Relevant Period, the

3

Defendants gave clients fake account statements, claiming the Tiger Wolf Funds were generating
large profits.
11. When confronted with bank records showing new client money being sent to
existing clients, Mercado admitted under oath that he operated Tiger Wolf as a Ponzi scheme.
12. Total client losses are at least $861,000.
VIOLATIONS
13.   Defendants Mercado and Tiger Wolf, by virtue of their conduct, directly or
indirectly, have engaged in violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of
1933 (“Securities Act”) [15 U.S.C. §§ 77e(a), (c) and 77q(a)], Section 10(b) of the Securities
Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b)] and Rule 10b-5 thereunder [17
C.F.R. § 240.10b-5], and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of
1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1), (2) and (4)] and Rule 206(4)-8 thereunder [17
C.F.R § 275.206(4)-8].
14. Against both defendants, the Commission seeks permanent injunctive relief,
disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties.  As to Mercado,
the Commission further seeks: (i) a conduct-based injunction that permanently enjoins him from,
directly or indirectly (including through any entity owned or controlled by Mercado),
participating in the issuance, purchase, offer, or sale of any security (excluding the purchase or
sale of securities for Mercado’s own personal account); and (ii) an officer and director bar.
JURISDICTION AND VENUE
15. The Commission brings this action pursuant to authority conferred upon it by
Sections 20(b), (c) and (d) of the Securities Act [15 U.S.C. §§ 77t(b)-(d)], Sections 21(d) and
21(e) of the Exchange Act [15 U.S.C. §§ 78u(d)-(e)] and Sections 209(d) and 209(e) of the

4

Advisers Act [15 U.S.C.  §§ 80b-9(d)-(e)] to enjoin the Defendants from engaging in the
transactions, acts, practices and courses of business alleged in this Complaint, and transactions,
acts, practices and courses of business of similar purport and object, for disgorgement of illegally
obtained funds and other equitable relief, and for civil money penalties.
16. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d) and
22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)], Sections 21(d), 21(e) and 27 of
the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa], and Section 214 of the Advisers Act [15
U.S.C. § 80b-14].
17. The Defendants, directly and indirectly, have made use of the mails, the means and
instrumentalities of transportation and communication in interstate commerce, and the means and
instrumentalities of interstate commerce, in connection with the transactions, acts, practices, and
courses of business alleged in this Complaint.
18. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C.
§ 77v(a)], Section 27 of the Exchange Act [15 U.S.C. § 78aa], and Section 209 of the Advisers Act
[15 U.S.C. § 80b-9], because certain of the transactions, acts, practices and courses of business
constituting violations of the Securities Act, Exchange Act and Advisers Act have occurred within
the Western District of North Carolina
THE DEFENDANTS AND RELATED ENTITY
19. Frank Lynold Mercado, age 26 and a resident of Charlotte, North Carolina, was
Tiger Wolf’s founder, manager, registered agent and Chief Investment Officer.  Mercado is not
known to be associated with any entity registered with the Commission.  In December 2022,
Mercado filed a petition for personal bankruptcy in the Southern District of Florida, but then
fraudulently emailed certain Tiger Wolf clients in January 2023 that Tiger Wolf—the advisory

5

firm—had declared bankruptcy.  On September 7, 2023, the Bankruptcy Court issued an order
denying Mercado a discharge under the Bankruptcy Code after five Tiger Wolf clients filed
adversary complaints against Mercado alleging fraud.
20. Tiger Wolf Capital, LLC, which Mercado also called “Tiger-Wolf Capital,
LLC” or “Tiger Capital, LLC” (collectively, “Tiger Wolf”), is a Florida limited liability
company created in August 2019.  Mercado was Tiger Wolf’s founder, manager, registered agent
and Chief Investment Officer, and he controlled all of Tiger Wolf’s operations, bank accounts
and brokerage accounts.  Tiger Wolf served as an investment adviser to the Tiger Wolf Funds, as
well as an adviser to individual Tiger Wolf advisory clients.  Tiger Wolf was administratively
dissolved by the Florida Division of Corporations in September 2022 for failure to file an annual
report.  Tiger Wolf has never been registered with the Commission.
21. Tiger Wolf Capital Fund, LP, which Mercado also called the “Tiger-Wolf
Capital Fund, LP” and the “Tiger Wolf Capital Hedge Fund” (collectively, the “Tiger Wolf
Partnership Fund”), is a Delaware limited partnership formed in August 2019, and a pooled
investment vehicle.  Tiger Wolf, the advisory firm, served as general partner for the Tiger Wolf
Partnership Fund, and Mercado as the fund manager.  The Tiger Wolf Partnership Fund appears
to have been the only one of the supposed Tiger Wolf Funds that existed in corporate or
partnership form.  In June 2023, Tiger Wolf Partnership Fund lost its good standing status with
the Delaware Division of Corporations for failure to pay required state franchise taxes.

6

FACTS
A. Background
22. In the summer of 2019, before beginning his final year at Florida International
University (“FIU”), Mercado worked as a banking intern at the corporate office of a large,
national bank (Bank A) in Charlotte, North Carolina.
23. During the internship, Mercado met another Bank A intern, and together they
decided to establish Tiger Wolf and the Tiger Wolf Partnership Fund as an investment adviser
and pooled investment vehicle, respectively.
24. The other intern initially assisted Mercado in organizing Tiger Wolf as a Florida
limited liability company and the Tiger Wolf Partnership Fund as a Delaware entity, and he
helped Mercado to open a brokerage account in the name of the Tiger Wolf Partnership Fund at
Broker A.  On the brokerage account opening forms, Mercado was listed as the sole individual in
control of this account, and only his cell phone and email address were listed on the account.
Soon after the opening of the Tiger Wolf Partnership Fund’s brokerage account, however, the
other intern ceased working with Mercado and Tiger Wolf due to a personal health issue.
25. On August 22, 2019, Mercado signed and submitted the account opening forms
for a bank account in the name of Tiger Wolf at Bank B.  Throughout the Relevant Period,
Mercado was the only individual with control over Tiger Wolf’s bank account at Bank B, as well
as Tiger Wolf’s second bank account at Bank C, which Mercado later opened in December 2021.
26. After graduating from FIU, Mercado returned to Charlotte in early 2020 to work
at Bank A as a full-time banking associate.
27. According to his personnel records, Mercado did not disclose to Bank A the
existence of Tiger Wolf or the Tiger Wolf Partnership Fund, or his ongoing roles in either, as

7

part of his annual “Investment Monitoring and Outside Business Activities” certifications.  He
also falsely certified to Bank A that he did not have any open brokerage accounts in his name or
under his control.
28. From early 2020 through February 2023, Mercado ran Tiger Wolf’s operations
from apartments that he rented in Charlotte, North Carolina.
B. Mercado and Tiger Wolf Advise Clients to Invest in Tiger Wolf Funds.
29. In mid-August 2019, Mercado began soliciting prospective clients to open
accounts with Tiger Wolf and become clients of the firm, after which Mercado recommended
clients invest in, and offered and sold those clients investments in the Tiger Wolf Funds.
30. When clients sent their funds, Mercado deposited the money into either Tiger
Wolf’s own bank accounts, or into one of Mercado’s personal bank accounts at Bank B or Bank
D.
31. No bank accounts ever existed in the names of the Tiger Wolf Funds in which
clients believed they were investing.
32. Mercado recommended, offered and sold interests in the Tiger Wolf Partnership
Fund, as well as other funds that he referred to as Tiger Wolf’s “Tesla Fund” and the “Medallion
Fund.”
33. Much of Mercado’s work in offering and selling the Tiger Wolf Funds took place
through his personal Tiger Wolf email account and text messages from his smartphone.
34. Mercado recommended new clients invest in one or more of his purported Tiger
Wolf Funds, or that existing clients roll over money from one fund to another.  To some clients,
Mercado did not give a specific name to the fund in which they were investing, indicating

8

instead that clients were investing in a general “hedge fund” or “fund” advised and managed by
Tiger Wolf and Mercado.
35. In operating Tiger Wolf, Mercado provided three types of services: (1) advising
and managing the Tiger Wolf Funds and their purported portfolios; (2) advising individual
clients as to which of the Tiger Wolf Funds to invest in; and (3) operating an investment
education service which offered paid subscriptions on the social media platform Discord, Inc.
(“Discord”) to interested individuals.
36. These Discord subscriptions allowed access to generalized commentary and
lectures on investing skills by Mercado.  The Discord platform, which the general public was
able to join, was an impersonal, non-selective means of communication that Mercado and Tiger
Wolf used to find future Tiger Wolf clients.  Mercado and Tiger Wolf also posted public videos
online describing Tiger Wolf and its services.
37. In addition to using social media and online videos, Mercado also created a Tiger
Wolf website – accessible to the general public – to solicit clients.
38. Mercado engaged a friend who previously lived in his dormitory at FIU to serve
as the website manager and Mercado emailed his friend written content and photos about Tiger
Wolf and its advisory business for posting on the website.
39. This website, identifying Mercado as Tiger Wolf’s founder and Chief Investment
Officer, described Tiger Wolf as offering “hedge fund management” for “100% Satisfied
Investors” and boasted a “50% Return vs. Market Yield of 8%.”
40. On the website, Mercado posted “testimonials” from Tiger Wolf clients who
described their “trading journeys,” including one putative client whose testimonial claimed:

9

“Last year when I saw Frank started a hedge fund, I was all in.  I sent him $10k to manage and
he quickly more than doubled it.”
41. Further, Mercado, starting in 2020, developed and distributed to clients via his
Tiger Wolf email account a 23-page “Pitch Deck,” describing Tiger Wolf’s target audience as
the “average person” and proclaiming, “that the opportunity to invest should be available to
everyone, not just wealthy individuals.”
42. Similar to the Tiger Wolf website, the Pitch Deck explained that Tiger Wolf
offered a “50%+” return on investment through Tiger Wolf’s hedge fund offering.  Further, the
Pitch Deck described Mercado as a former investment banker who successfully traded equities
for five years.
43. The Pitch Deck slides claimed “TWC has generated extraordinary returns” and
offered “unparalleled risk management,” while also cautioning that “[i]nvesting in the SP500
will generate inferior returns in comparison to Tiger Wolf Capital.”  The Pitch Deck also
described Tiger Wolf as offering an “[u]ncompromising focus on risk management.”
44. Finally, Mercado also reached out via phone, text messages, and social media to
various friends and acquaintances to solicit them personally to become Tiger Wolf clients and
investors in the Tiger Wolf Funds.  Various prospective clients received and reviewed the Pitch
Deck before deciding to become clients and invest.
45. When Mercado identified an investor interested in becoming a client of Tiger
Wolf and investing in the Tiger Wolf Funds, Mercado would typically send the new client an
investor agreement which he signed on behalf of Tiger Wolf, the advisory firm, as its “fund
manager.”

10

46. The document explained that a client would have an “account” with Tiger Wolf
and that clients were investing their money “with the firm.”
47. Further, the document noted that it was an agreement between Tiger Wolf and the
client, and that Tiger Wolf “will manage and invest the client’s invested capital to profit on the
client’s behalf,” and that Tiger Wolf would “charge fees for their [sic] services.”
48. Client fees typically consisted of a three-percent management fee, as well as a
performance fee of generally 20 percent of a client’s profits, triggered if the client’s investment
“generates a return greater than 20 percent on the investment provided,” according to the
investor agreement.
49. At times, Mercado offered certain clients lower fee rates for Tiger Wolf’s
services.  Each agreement claimed that the firm “will mitigate risks” and will only make
investments “after careful research and analysis” concerning potential profits.
50. Many client agreements had a one-year or shorter duration and, at the end of the
period, Tiger Wolf was supposed to return principal, plus or minus any gains or losses from
Mercado’s management of the Tiger Wolf Fund in which the client invested.
51. The client agreements did not mention any of the names of the individual funds in
which Mercado and Tiger Wolf recommended that clients invest, nor did the agreements mention
the names of the funds in which clients were purportedly invested.
52. Through their solicitations, between August 13, 2019, and February 1, 2023, the
Defendants offered and sold to more than 100 Tiger Wolf clients upwards of $1.4 million of
investments in Tiger Wolf Funds.

11

53. Notably, many of the clients invested in the scheme more than once after the
Defendants falsely claimed clients’ initial investments were generating profits and advised clients to
roll over their funds and invest anew.
54. Mercado –   living and working in Charlotte, North Carolina – and Tiger Wolf
entered investment agreements with clients residing in various states, including, but not limited to,
California, Florida, Kansas, and Maryland.
C. Defendants’ Misrepresentations
55.  The Defendants defrauded both the Tiger Wolf Partnership Fund, as well as Tiger
Wolf’s individual advisory clients.  Specifically, the Defendants diverted to themselves fund assets
for non-fund expenses, while also making false representations about Mercado and investments in
the Tiger Wolf Funds.
56. Despite the claims in the 2020 Pitch Deck, Mercado never worked as an
investment banker and did not have five years of experience in trading equities, as brokerage
records indicate he opened his first personal trading account in 2017 and his full-time job at
Bank A was as a banking associate focused on internal corporate accounting systems, with no
role or function concerning securities or investments.
57. Moreover, multiple Tiger Wolf Funds did not exist.  The Tiger Wolf Partnership
Fund was the only one of the Tiger Wolf Funds that ever existed in corporate or partnership form
and, as described below, had a brokerage account that existed for only about eleven months.
58. The Defendants never formally organized, nor registered with the Commission,
any “Tesla Fund” or “Medallion Fund.”  Moreover, no brokerage accounts existed under the
names of such funds.

12

59. Contrary to what clients were told, the vast majority of the $1.4 million in Tiger
Wolf client funds Defendants raised was never placed into the Tiger Wolf Partnership Fund’s
brokerage account for investing.
60. In total, Mercado only deposited approximately $121,000 into the Tiger Wolf
Partnership Fund brokerage account at Broker A.
61. Notably, the Tiger Wolf Partnership Fund never made 50 percent returns as the
Defendants claimed, but instead incurred net trading losses of at least $47,000.
62. Additionally, Mercado used more than $37,000 of client funds that had been
deposited into Tiger Wolf’s bank accounts at Bank B and at Bank C  for his personal expenses,
including shopping, travel, and entertainment.
63. For example, during the Relevant Period, Mercado used Tiger Wolf’s business
banking accounts – in which client funds were deposited – for personal purchases at AirBNB,
Chipotle, Hooters, Costco, CVS, Macy’s, Starbucks, and various bars and restaurants, as well as
a tattoo parlor and a body-piercing business.  Mercado also used the Tiger Wolf bank accounts to
pay for a gym membership and vacation expenses in Florida.
64. Mercado and Tiger Wolf further misappropriated client funds intended for
investment and used those funds for Tiger Wolf business expenses, including fees for Tiger
Wolf’s website and a subscription for an online meeting platform.
65. Separately, Mercado also instructed certain clients to send their funds to his
personal bank accounts at Bank B and Bank D, from which he used the funds for Ponzi payments
to existing clients, as well as for securities trading in non-Tiger Wolf brokerage accounts.
66. In total, Mercado made hundreds of thousands of dollars in Ponzi payments to
clients, while also using Tiger Wolf client funds to make more than $1 million worth of deposits

13

into non-Tiger Wolf brokerage accounts in  his own name or the names of others at Broker A,
Broker B,  Broker C and Broker D, including at least four accounts opened in his mother’s name
and at least two other accounts that he opened using the identities of certain Tiger Wolf clients
without their authorization.
67. The non-Tiger Wolf brokerage accounts experienced net trading losses of more
than $250,000.
68. Finally, in selling interests in the Tiger Wolf Funds, Defendants made no effort to
confirm clients’ income or otherwise assess whether clients qualified as accredited investors.
For example, with multiple Tiger Wolf clients Mercado never discussed the term “accredited
investor,” nor did Mercado ask them about their net worth or annual income.
D.   Tiger Wolf Capital’s Collapse
69. The Tiger Wolf Partnership Fund brokerage account at Broker A, which Mercado
began using for certain client investments in August 2019, was open for approximately eleven
months until Broker A closed the account in July 2020 after flagging it for what Broker A
deemed to be impermissible advisory activity.
70. Despite the closure of this account, Mercado continued soliciting new clients to
invest in the Tiger Wolf Funds, while also soliciting existing clients to re-invest in one or more
of the Tiger Wolf Funds without telling them that the lone brokerage account for any Fund had
been closed and that the Tiger Wolf Funds had no other brokerage accounts under any Tiger
Wolf Fund name.
71. In total, approximately $1 million of the client funds raised by the Defendants
were collected after Broker A closed the Tiger Wolf Partnership Fund brokerage account in July
2020.

14

72. Further, prior to his bankruptcy filing in December 2022, Mercado did not tell
clients that he made losing investments with client funds in both the Tiger Wolf Partnership
Fund and in separate non-Tiger Wolf brokerage accounts at Broker A, Broker B, Broker C  and
Broker D – including accounts in his mother’s name and in the names of certain Tiger Wolf
clients whose identities Mercado had used without authorization in order to open accounts using
their birthdates, names and other information, while also using his own email, phone number and
bank accounts.
73. The agreements between Tiger Wolf and its individual advisory clients were set
for terms of limited duration, usually lasting one year or less.  Upon the end of the term, clients
could redeem their interests in the Tiger Wolf Funds, or, as Mercado often successfully
proposed, clients could re-invest or roll over their investment and any profits for another term.
74. To encourage such re-investments, Mercado frequently crafted fictitious account
statements or email updates to dupe investors into thinking that they were making profits.
75. When Mercado was unable to convince a client to reinvest, Mercado would
typically use incoming funds from new clients to make Ponzi payments in order to pay back
previous clients, while describing the payments in communications to clients as Tiger Wolf Fund
“profits.”
76. In the final months of 2022, Mercado began to run out of money to make further
Ponzi payments to Tiger Wolf clients.
77. On December 22, 2022, Mercado filed a petition for Chapter 7 personal bankruptcy
in the United States Bankruptcy Court for the Southern District of Florida.  However, Mercado then
emailed certain Tiger Wolf clients on January 19, 2023, telling them that Tiger Wolf – the entity –
had declared bankruptcy.

15

78. Mercado then filed amended schedules on February 1, 2023, seeking to discharge a
total of $644,099.68 in “business debt” that Mercado claimed that he owed to 31 creditors, who
were, in reality, all clients of Tiger Wolf.  Five of the clients filed adversary complaints
challenging Mercado’s bankruptcy, each claiming they were the victims of Mercado’s fraudulent
investment scheme and arguing that Mercado’s debts to them should not be discharged.
79. On September 7, 2023, the Bankruptcy Court issued an order denying Mercado a
discharge under the Bankruptcy Code and, on April 26, 2024, the Bankruptcy Court issued its
final decree, whereby the Trustee was discharged and the case was closed.
80. Separately, in August 2023, Bank A terminated Mercado’s employment.
81. During the Commission’s investigation that preceded the filing of this complaint,
Mercado admitted in sworn testimony that he had lost clients’ money and had operated Tiger
Wolf as a Ponzi scheme in which he used funds from new clients to pay back previous clients,
disguising the payments as “profits.”
82. Mercado explained that he made the Ponzi payments because “the company
already started failing and individuals still believed in me, and I was afraid to let them down.  So
instead of telling them that we were losing money, I just did not say that and just did what I did.”
COUNT I –SECURITIES REGISTRATION VIOLATIONS

Violations of Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and 77e(c)]

83. Paragraphs 1 through 82 are hereby realleged and are incorporated herein by
reference.
84. From at least August 13, 2019, through February 1, 2023, Defendants Mercado and
Tiger Wolf offered and sold securities.

16

85. Defendants Mercado and Tiger Wolf used interstate transportation, communication
or mails in connection with the offer and sale of securities.
86. At the time of the offer and sale of securities, no registration statement was in effect
as to the securities offered and sold.
87. By reason of the foregoing, Defendants Mercado and Tiger Wolf have violated and,
unless enjoined, will continue to violate Sections 5(a) and 5(c) of the Securities Act [15 U.S.C.
§§ 77e(a) and 77e(c)].
COUNT II—FRAUD

Violations of Section 17(a)(1) of the Securities Act [15 U.S.C. § 77q(a)(1)]
88. Paragraphs 1 through 82 are hereby realleged and are incorporated herein by
reference.
89. From at least August 13, 2019, through at least February 1,    2023, Defendants
Mercado and Tiger Wolf,  in the offer and sale of the securities described herein, by the use of
means and instruments of transportation and communication in interstate commerce and by use of
the mails, directly and indirectly, employed devices, schemes and artifices to defraud purchasers of
such securities, all as more particularly described above.
90. The Defendants Mercado and Tiger Wolf knowingly, intentionally, and/or recklessly
engaged in the aforementioned devices, schemes and artifices to defraud.
91. By reason of the foregoing, the Defendants Mercado and Tiger Wolf, directly and
indirectly, have violated and, unless enjoined, will continue to violate Section 17(a)(1) of the
Securities Act [15 U.S.C. § 77q(a)(1)].
COUNT III—FRAUD

Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act
[15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)]

17

92. Paragraphs 1 through 82 are hereby realleged and are incorporated herein by
reference.
93. From at least August 13, 2019, through at least February 1, 2023, Defendants
Mercado and Tiger Wolf,  in the offer and sale of the securities described herein, by the use of the
means and instruments of transportation and communication in interstate commerce and by use of
the mails, directly and indirectly:
  a) obtained money and property by means of untrue statements of material
fact and omissions to state material facts necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading; and
  b) engaged in transactions, practices and courses of business which would
and did operate as a fraud and deceit upon the purchasers of such securities, all as more
particularly described above.
94. By reason of the foregoing, the Defendants Mercado and Tiger Wolf,  directly and
indirectly, have violated and, unless enjoined, will continue to violate Sections 17(a)(2) and 17(a)(3)
of the Securities Act [15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)].
COUNT IV—FRAUD

Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)]
and Rule 10b-5 thereunder  [17 C.F.R. § 240.10b-5]

95. Paragraphs 1 through 82 are hereby realleged and are incorporated herein by
reference.
 96. From at least August 13, 2019, through at least February 1,    2023, Defendants
Mercado and Tiger Wolf, in connection with the purchase and sale of securities described herein, by

18

the use of the means and instrumentalities of interstate commerce and by use of the mails, directly
and indirectly:
 a) employed devices, schemes, and artifices to defraud;
 b) made untrue statements of material facts and omitted to state material facts
necessary in order to make the statements made, in light of the circumstances under which they
were made, not misleading; and
 c) engaged in acts, practices, and courses of business which would and did
operate as a fraud and deceit upon the purchasers of such securities, all as more particularly
described above.
97. The Defendants knowingly, intentionally, and/or recklessly engaged in the
aforementioned devices, schemes and artifices to defraud, made untrue statements of material
facts and omitted to state material facts, and engaged in fraudulent acts, practices and courses of
business.
98. By reason of the foregoing, Defendants Mercado and Tiger Wolf, directly and
indirectly, have violated and, unless enjoined, will continue to violate Section 10(b) of the Exchange
Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5].
COUNT V—INVESTMENT ADVISER FRAUD

Violations of Sections 206(1) and 206(2) of the Advisers Act
[15 U.S.C. §§ 80b-6(1), (2)]
 99. Paragraphs 1 through 82 are hereby realleged and are incorporated herein by
reference.
100. Defendants Mercado and Tiger Wolf were at all relevant times investment
advisers within the meaning of Section 202(a)(11) of the Advisers Act [15 U.S.C. § 80b-
2(a)(11)].

19

101.     From at least August 13, 2019, through February 1, 2023, Mercado and Tiger
Wolf, directly or indirectly, by the use of the mails or any means or instrumentality of interstate
commerce, while acting knowingly or recklessly: (a) have employed devices, schemes, or
artifices to defraud one or more advisory clients and/or prospective clients; and (b) have engaged
in transactions, practices, or courses of business which operated as fraud or deceit upon one or
more advisory clients and/or prospective clients.
102.     By reason of the transactions, acts, omissions, practices and courses of business
set forth herein, Defendants Mercado and Tiger Wolf have violated, and, unless enjoined, will
continue to violate Sections 206(1) and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1), (2)].
COUNT VI—INVESTMENT ADVISER FRAUD ON
POOLED INVESTMENT VEHICLE INVESTORS

Violations of Section 206(4) of the Advisers Act
[15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8]

 103. Paragraphs 1 through 82 are hereby realleged and incorporated herein by reference.

 104. By engaging in the conduct described above, Defendants Mercado and Tiger Wolf,
from at least August 13, 2019, through February 1, 2023, while acting as investment advisers to a
pooled investment vehicle, by use of the means and instrumentalities of interstate commerce and of
the mails:
  a)  made untrue statements of material fact and omitted to state material facts
necessary to make statements made, in the light of the circumstances under which they were made,
not misleading, to investors and prospective investors in the pooled investment vehicles; and
  b)   engaged in acts, practices, and courses of business that were fraudulent,
deceptive and manipulative with respect to investors and prospective investors in pooled
investment vehicles; all as more particularly described above.

20

 105. By reason of the foregoing, Defendants Mercado and Tiger Wolf have violated and
unless enjoined, will continue to violate Section 206(4) of the Advisers Act [15 U.S.C. § 80b-6(4)]
and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].
PRAYER FOR RELIEF
WHEREFORE, Plaintiff Commission, respectfully prays that the Court:
I.
 Make findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil
Procedure, finding that Defendants named herein committed the violations alleged herein.
II.
 Issue a permanent injunction enjoining Defendants Mercado and Tiger Wolf, and their
agents, servants, employees, attorneys, and all persons in active concert or participation with them
who receive actual notice of the order by personal service or otherwise, and each of them:
 a.     from violating Section 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and
77e(c)];
b.  from violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)];
 c.  from violating Section 10(b) of the Exchange Act [15 U.S.C. §    78j(b)] and Rule
10b-5 thereunder [17 C.F.R. §   240.10b-5]; and
d. from violating Sections 206(1), 206(2) and 206(4) of the Advisers Act [15 U.S.C.
§§ 80b-6(1), (2), (4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8].
III.
As to Mercado, issue: (i) a conduct-based injunction permanently restraining and
enjoining him from, directly or indirectly (including through any entity owned or controlled by
Mercado), participating in the issuance, purchase, offer, or sale of any security (excluding the

21

purchase or sale of securities for Mercado’s own personal account); and (ii) an officer and
director bar;
IV.
 Issue an order directing Defendants Mercado and Tiger Wolf to pay disgorgement of all ill-
gotten  gains  or  unjust  enrichment  and  to  pay  prejudgment  interest  on  the  amount  ordered  to  be
disgorged, to effect the remedial purposes of the federal securities laws.
V.
Issue an order requiring Defendants Mercado and Tiger Wolf, pursuant to Section 20(d) of
the Securities Act [15 U.S.C. §   77t(d)], Sections 21(d)(3) and 21A of the Exchange Act [15 U.S.C.
§§ 78u(d)(3) and 78u-1],  and Section 209(e) of the Advisers Act [15 U.S.C. § 80b9(e)], to pay civil
monetary penalties.
VI.
 Issue an order that retains jurisdiction over
 this action in order to implement and carry out
the terms of all orders and decrees that may have been entered or to entertain any suitable
application or motion by the Commission for additional relief within the jurisdiction of this Court.
VII.
 Grant such other and further relief as this Court may deem just, equitable, and appropriate in
connection with the enforcement of the federal securities laws and for the protection of investors.
RESPECTFULLY SUBMITTED,
     /s/Edward G. Sullivan
     Edward G. Sullivan (GA Bar No. 691140)
      Tel. (404) 842-7612
      [email protected]

     /s/M. Graham Loomis
     M. Graham Loomis (GA Bar No. 457868)
      Tel: (404) 842-7622

22

      [email protected]

      /s/Brian M. Basinger
      Brian M. Basinger (GA Bar No. 595901)
      Tel: (404) 842-5748
      [email protected]

COUNSEL FOR PLAINTIFF
U. S. SECURITIES AND EXCHANGE COMMISSION
950 East Paces Ferry Road, N.E., Suite 900
Atlanta, Georgia 30326

1 
 

IN THE UNITED STATES DISTRICT COURT 
FOR THE WESTERN DISTRICT OF NORTH CAROLINA 

CHARLOTTE DIVISION 
 
 
  
SECURITIES AND EXCHANGE 
COMMISSION, 

 

  
Plaintiff,   Civil Action File No: 
  

v.  
    __: _____-CV-________ 
FRANK LYNOLD MERCADO and TIGER 
WOLF CAPITAL, LLC, 

 

  
Defendants.  
  

 
COMPLAINT FOR INJUNCTIVE AND OTHER RELIEF 

 
 The plaintiff, Securities and Exchange Commission (“Commission”), files this Complaint 

and alleges the following: 

SUMMARY 

1. Between approximately August 13, 2019, and February 1, 2023 (the “Relevant 

Period”), Frank Lynold Mercado (“Mercado”) and Tiger Wolf Capital, LLC (“Tiger Wolf”), an 

unregistered investment adviser controlled by Mercado, offered and sold upwards of $1.4 million in 

unregistered securities to more than 100 individual Tiger Wolf advisory clients. 

2. Mercado and Tiger Wolf (collectively, “Defendants”) led clients to believe they 

were investing in funds that Mercado and Tiger Wolf managed and advised (collectively, the “Tiger 

Wolf Funds”). 

3. Defendants’ offering materials described Mercado as an experienced trader and 

explained the firm would trade the assets of the Tiger Wolf Funds in which clients invested in 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 1 of 22



2 
 

exchange for which clients would pay an annual management fee, as well as a performance fee if 

certain profits were achieved. 

4. Further, Tiger Wolf claimed that clients were receiving a “50%+” return on 

investment, and that the firm oversaw client investments with an “[u]ncompromising focus on risk 

management.” 

5. These representations were false.  Of the more than $1.4 million the Defendants 

raised from clients, Mercado and Tiger Wolf deposited only about $121,000 into the lone Tiger 

Wolf Funds’ brokerage account identified by Commission staff. 

6. Between August 2019 and July 2020, Mercado and Tiger Wolf used funds in the 

brokerage account to trade securities, but did so unsuccessfully, generating net losses of 

approximately $47,000. 

7. Of the remaining funds raised from individual clients, Tiger Wolf and Mercado 

made hundreds of thousands of dollars in Ponzi payments using funds from new clients to pay 

existing clients, while Mercado also diverted more than $37,000 directly from Tiger Wolf’s bank 

accounts to pay personal expenses – including shopping, travel and entertainment. 

8. Separately, Defendants also made more than $1 million worth of deposits in 

brokerage accounts that Mercado opened under the names of other individuals, including his 

mother, but which he controlled. 

9. Through trading in these accounts, Mercado sustained more than $250,000 of 

additional net trading losses. 

10. Mercado never disclosed any of his trading losses to Tiger Wolf clients until after he 

filed for personal bankruptcy in December 2022.  Instead, during most of the Relevant Period, the 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 2 of 22



3 
 

Defendants gave clients fake account statements, claiming the Tiger Wolf Funds were generating 

large profits. 

11. When confronted with bank records showing new client money being sent to 

existing clients, Mercado admitted under oath that he operated Tiger Wolf as a Ponzi scheme.   

12. Total client losses are at least $861,000. 

VIOLATIONS 

13.   Defendants Mercado and Tiger Wolf, by virtue of their conduct, directly or 

indirectly, have engaged in violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 

1933 (“Securities Act”) [15 U.S.C. §§ 77e(a), (c) and 77q(a)], Section 10(b) of the Securities 

Exchange Act of 1934 (“Exchange Act”) [15 U.S.C. §§ 78j(b)] and Rule 10b-5 thereunder [17 

C.F.R. § 240.10b-5], and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 

1940 (“Advisers Act”) [15 U.S.C. §§ 80b-6(1), (2) and (4)] and Rule 206(4)-8 thereunder [17 

C.F.R § 275.206(4)-8]. 

14. Against both defendants, the Commission seeks permanent injunctive relief, 

disgorgement of ill-gotten gains plus prejudgment interest, and civil penalties.  As to Mercado, 

the Commission further seeks: (i) a conduct-based injunction that permanently enjoins him from, 

directly or indirectly (including through any entity owned or controlled by Mercado), 

participating in the issuance, purchase, offer, or sale of any security (excluding the purchase or 

sale of securities for Mercado’s own personal account); and (ii) an officer and director bar. 

JURISDICTION AND VENUE 

15. The Commission brings this action pursuant to authority conferred upon it by 

Sections 20(b), (c) and (d) of the Securities Act [15 U.S.C. §§ 77t(b)-(d)], Sections 21(d) and 

21(e) of the Exchange Act [15 U.S.C. §§ 78u(d)-(e)] and Sections 209(d) and 209(e) of the 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 3 of 22



4 
 

Advisers Act [15 U.S.C.  §§ 80b-9(d)-(e)] to enjoin the Defendants from engaging in the 

transactions, acts, practices and courses of business alleged in this Complaint, and transactions, 

acts, practices and courses of business of similar purport and object, for disgorgement of illegally 

obtained funds and other equitable relief, and for civil money penalties. 

16. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d) and 

22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)], Sections 21(d), 21(e) and 27 of 

the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e) and 78aa], and Section 214 of the Advisers Act [15 

U.S.C. § 80b-14]. 

17. The Defendants, directly and indirectly, have made use of the mails, the means and 

instrumentalities of transportation and communication in interstate commerce, and the means and 

instrumentalities of interstate commerce, in connection with the transactions, acts, practices, and 

courses of business alleged in this Complaint. 

18. Venue lies in this Court pursuant to Section 22(a) of the Securities Act [15 U.S.C. 

§ 77v(a)], Section 27 of the Exchange Act [15 U.S.C. § 78aa], and Section 209 of the Advisers Act 

[15 U.S.C. § 80b-9], because certain of the transactions, acts, practices and courses of business 

constituting violations of the Securities Act, Exchange Act and Advisers Act have occurred within 

the Western District of North Carolina 

THE DEFENDANTS AND RELATED ENTITY 

19. Frank Lynold Mercado, age 26 and a resident of Charlotte, North Carolina, was 

Tiger Wolf’s founder, manager, registered agent and Chief Investment Officer.  Mercado is not 

known to be associated with any entity registered with the Commission.  In December 2022, 

Mercado filed a petition for personal bankruptcy in the Southern District of Florida, but then 

fraudulently emailed certain Tiger Wolf clients in January 2023 that Tiger Wolf—the advisory 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 4 of 22



5 
 

firm—had declared bankruptcy.  On September 7, 2023, the Bankruptcy Court issued an order 

denying Mercado a discharge under the Bankruptcy Code after five Tiger Wolf clients filed 

adversary complaints against Mercado alleging fraud.   

20. Tiger Wolf Capital, LLC, which Mercado also called “Tiger-Wolf Capital, 

LLC” or “Tiger Capital, LLC” (collectively, “Tiger Wolf”), is a Florida limited liability 

company created in August 2019.  Mercado was Tiger Wolf’s founder, manager, registered agent 

and Chief Investment Officer, and he controlled all of Tiger Wolf’s operations, bank accounts 

and brokerage accounts.  Tiger Wolf served as an investment adviser to the Tiger Wolf Funds, as 

well as an adviser to individual Tiger Wolf advisory clients.  Tiger Wolf was administratively 

dissolved by the Florida Division of Corporations in September 2022 for failure to file an annual 

report.  Tiger Wolf has never been registered with the Commission. 

21. Tiger Wolf Capital Fund, LP, which Mercado also called the “Tiger-Wolf 

Capital Fund, LP” and the “Tiger Wolf Capital Hedge Fund” (collectively, the “Tiger Wolf 

Partnership Fund”), is a Delaware limited partnership formed in August 2019, and a pooled 

investment vehicle.  Tiger Wolf, the advisory firm, served as general partner for the Tiger Wolf 

Partnership Fund, and Mercado as the fund manager.  The Tiger Wolf Partnership Fund appears 

to have been the only one of the supposed Tiger Wolf Funds that existed in corporate or 

partnership form.  In June 2023, Tiger Wolf Partnership Fund lost its good standing status with 

the Delaware Division of Corporations for failure to pay required state franchise taxes. 

  

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 5 of 22



6 
 

FACTS 

A. Background 

22. In the summer of 2019, before beginning his final year at Florida International 

University (“FIU”), Mercado worked as a banking intern at the corporate office of a large, 

national bank (Bank A) in Charlotte, North Carolina. 

23. During the internship, Mercado met another Bank A intern, and together they 

decided to establish Tiger Wolf and the Tiger Wolf Partnership Fund as an investment adviser 

and pooled investment vehicle, respectively. 

24. The other intern initially assisted Mercado in organizing Tiger Wolf as a Florida 

limited liability company and the Tiger Wolf Partnership Fund as a Delaware entity, and he 

helped Mercado to open a brokerage account in the name of the Tiger Wolf Partnership Fund at 

Broker A.  On the brokerage account opening forms, Mercado was listed as the sole individual in 

control of this account, and only his cell phone and email address were listed on the account.  

Soon after the opening of the Tiger Wolf Partnership Fund’s brokerage account, however, the 

other intern ceased working with Mercado and Tiger Wolf due to a personal health issue. 

25. On August 22, 2019, Mercado signed and submitted the account opening forms 

for a bank account in the name of Tiger Wolf at Bank B.  Throughout the Relevant Period, 

Mercado was the only individual with control over Tiger Wolf’s bank account at Bank B, as well 

as Tiger Wolf’s second bank account at Bank C, which Mercado later opened in December 2021. 

26. After graduating from FIU, Mercado returned to Charlotte in early 2020 to work 

at Bank A as a full-time banking associate. 

27. According to his personnel records, Mercado did not disclose to Bank A the 

existence of Tiger Wolf or the Tiger Wolf Partnership Fund, or his ongoing roles in either, as 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 6 of 22



7 
 

part of his annual “Investment Monitoring and Outside Business Activities” certifications.  He 

also falsely certified to Bank A that he did not have any open brokerage accounts in his name or 

under his control.   

28. From early 2020 through February 2023, Mercado ran Tiger Wolf’s operations 

from apartments that he rented in Charlotte, North Carolina. 

B. Mercado and Tiger Wolf Advise Clients to Invest in Tiger Wolf Funds. 

29. In mid-August 2019, Mercado began soliciting prospective clients to open 

accounts with Tiger Wolf and become clients of the firm, after which Mercado recommended 

clients invest in, and offered and sold those clients investments in the Tiger Wolf Funds. 

30. When clients sent their funds, Mercado deposited the money into either Tiger 

Wolf’s own bank accounts, or into one of Mercado’s personal bank accounts at Bank B or Bank 

D. 

31. No bank accounts ever existed in the names of the Tiger Wolf Funds in which 

clients believed they were investing. 

32. Mercado recommended, offered and sold interests in the Tiger Wolf Partnership 

Fund, as well as other funds that he referred to as Tiger Wolf’s “Tesla Fund” and the “Medallion 

Fund.” 

33. Much of Mercado’s work in offering and selling the Tiger Wolf Funds took place 

through his personal Tiger Wolf email account and text messages from his smartphone. 

34. Mercado recommended new clients invest in one or more of his purported Tiger 

Wolf Funds, or that existing clients roll over money from one fund to another.  To some clients, 

Mercado did not give a specific name to the fund in which they were investing, indicating 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 7 of 22



8 
 

instead that clients were investing in a general “hedge fund” or “fund” advised and managed by 

Tiger Wolf and Mercado. 

35. In operating Tiger Wolf, Mercado provided three types of services: (1) advising 

and managing the Tiger Wolf Funds and their purported portfolios; (2) advising individual 

clients as to which of the Tiger Wolf Funds to invest in; and (3) operating an investment 

education service which offered paid subscriptions on the social media platform Discord, Inc. 

(“Discord”) to interested individuals. 

36. These Discord subscriptions allowed access to generalized commentary and 

lectures on investing skills by Mercado.  The Discord platform, which the general public was 

able to join, was an impersonal, non-selective means of communication that Mercado and Tiger 

Wolf used to find future Tiger Wolf clients.  Mercado and Tiger Wolf also posted public videos 

online describing Tiger Wolf and its services. 

37. In addition to using social media and online videos, Mercado also created a Tiger 

Wolf website – accessible to the general public – to solicit clients. 

38. Mercado engaged a friend who previously lived in his dormitory at FIU to serve 

as the website manager and Mercado emailed his friend written content and photos about Tiger 

Wolf and its advisory business for posting on the website. 

39. This website, identifying Mercado as Tiger Wolf’s founder and Chief Investment 

Officer, described Tiger Wolf as offering “hedge fund management” for “100% Satisfied 

Investors” and boasted a “50% Return vs. Market Yield of 8%.” 

40. On the website, Mercado posted “testimonials” from Tiger Wolf clients who 

described their “trading journeys,” including one putative client whose testimonial claimed: 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 8 of 22



9 
 

“Last year when I saw Frank started a hedge fund, I was all in.  I sent him $10k to manage and 

he quickly more than doubled it.” 

41. Further, Mercado, starting in 2020, developed and distributed to clients via his 

Tiger Wolf email account a 23-page “Pitch Deck,” describing Tiger Wolf’s target audience as 

the “average person” and proclaiming, “that the opportunity to invest should be available to 

everyone, not just wealthy individuals.” 

42. Similar to the Tiger Wolf website, the Pitch Deck explained that Tiger Wolf 

offered a “50%+” return on investment through Tiger Wolf’s hedge fund offering.  Further, the 

Pitch Deck described Mercado as a former investment banker who successfully traded equities 

for five years. 

43. The Pitch Deck slides claimed “TWC has generated extraordinary returns” and 

offered “unparalleled risk management,” while also cautioning that “[i]nvesting in the SP500 

will generate inferior returns in comparison to Tiger Wolf Capital.”  The Pitch Deck also 

described Tiger Wolf as offering an “[u]ncompromising focus on risk management.” 

44. Finally, Mercado also reached out via phone, text messages, and social media to 

various friends and acquaintances to solicit them personally to become Tiger Wolf clients and 

investors in the Tiger Wolf Funds.  Various prospective clients received and reviewed the Pitch 

Deck before deciding to become clients and invest. 

45. When Mercado identified an investor interested in becoming a client of Tiger 

Wolf and investing in the Tiger Wolf Funds, Mercado would typically send the new client an 

investor agreement which he signed on behalf of Tiger Wolf, the advisory firm, as its “fund 

manager.” 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 9 of 22



10 
 

46. The document explained that a client would have an “account” with Tiger Wolf 

and that clients were investing their money “with the firm.” 

47. Further, the document noted that it was an agreement between Tiger Wolf and the 

client, and that Tiger Wolf “will manage and invest the client’s invested capital to profit on the 

client’s behalf,” and that Tiger Wolf would “charge fees for their [sic] services.” 

48. Client fees typically consisted of a three-percent management fee, as well as a 

performance fee of generally 20 percent of a client’s profits, triggered if the client’s investment 

“generates a return greater than 20 percent on the investment provided,” according to the 

investor agreement. 

49. At times, Mercado offered certain clients lower fee rates for Tiger Wolf’s 

services.  Each agreement claimed that the firm “will mitigate risks” and will only make 

investments “after careful research and analysis” concerning potential profits. 

50. Many client agreements had a one-year or shorter duration and, at the end of the 

period, Tiger Wolf was supposed to return principal, plus or minus any gains or losses from 

Mercado’s management of the Tiger Wolf Fund in which the client invested. 

51. The client agreements did not mention any of the names of the individual funds in 

which Mercado and Tiger Wolf recommended that clients invest, nor did the agreements mention 

the names of the funds in which clients were purportedly invested. 

52. Through their solicitations, between August 13, 2019, and February 1, 2023, the 

Defendants offered and sold to more than 100 Tiger Wolf clients upwards of $1.4 million of 

investments in Tiger Wolf Funds. 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 10 of 22



11 
 

53. Notably, many of the clients invested in the scheme more than once after the 

Defendants falsely claimed clients’ initial investments were generating profits and advised clients to 

roll over their funds and invest anew. 

54. Mercado – living and working in Charlotte, North Carolina – and Tiger Wolf 

entered investment agreements with clients residing in various states, including, but not limited to, 

California, Florida, Kansas, and Maryland. 

C. Defendants’ Misrepresentations  

55.  The Defendants defrauded both the Tiger Wolf Partnership Fund, as well as Tiger 

Wolf’s individual advisory clients.  Specifically, the Defendants diverted to themselves fund assets 

for non-fund expenses, while also making false representations about Mercado and investments in 

the Tiger Wolf Funds. 

56. Despite the claims in the 2020 Pitch Deck, Mercado never worked as an 

investment banker and did not have five years of experience in trading equities, as brokerage 

records indicate he opened his first personal trading account in 2017 and his full-time job at 

Bank A was as a banking associate focused on internal corporate accounting systems, with no 

role or function concerning securities or investments. 

57. Moreover, multiple Tiger Wolf Funds did not exist.  The Tiger Wolf Partnership 

Fund was the only one of the Tiger Wolf Funds that ever existed in corporate or partnership form 

and, as described below, had a brokerage account that existed for only about eleven months. 

58. The Defendants never formally organized, nor registered with the Commission, 

any “Tesla Fund” or “Medallion Fund.”  Moreover, no brokerage accounts existed under the 

names of such funds. 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 11 of 22



12 
 

59. Contrary to what clients were told, the vast majority of the $1.4 million in Tiger 

Wolf client funds Defendants raised was never placed into the Tiger Wolf Partnership Fund’s 

brokerage account for investing. 

60. In total, Mercado only deposited approximately $121,000 into the Tiger Wolf 

Partnership Fund brokerage account at Broker A. 

61. Notably, the Tiger Wolf Partnership Fund never made 50 percent returns as the 

Defendants claimed, but instead incurred net trading losses of at least $47,000. 

62. Additionally, Mercado used more than $37,000 of client funds that had been 

deposited into Tiger Wolf’s bank accounts at Bank B and at Bank C for his personal expenses, 

including shopping, travel, and entertainment. 

63. For example, during the Relevant Period, Mercado used Tiger Wolf’s business 

banking accounts – in which client funds were deposited – for personal purchases at AirBNB, 

Chipotle, Hooters, Costco, CVS, Macy’s, Starbucks, and various bars and restaurants, as well as 

a tattoo parlor and a body-piercing business.  Mercado also used the Tiger Wolf bank accounts to 

pay for a gym membership and vacation expenses in Florida. 

64. Mercado and Tiger Wolf further misappropriated client funds intended for 

investment and used those funds for Tiger Wolf business expenses, including fees for Tiger 

Wolf’s website and a subscription for an online meeting platform. 

65. Separately, Mercado also instructed certain clients to send their funds to his 

personal bank accounts at Bank B and Bank D, from which he used the funds for Ponzi payments 

to existing clients, as well as for securities trading in non-Tiger Wolf brokerage accounts. 

66. In total, Mercado made hundreds of thousands of dollars in Ponzi payments to 

clients, while also using Tiger Wolf client funds to make more than $1 million worth of deposits 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 12 of 22



13 
 

into non-Tiger Wolf brokerage accounts in his own name or the names of others at Broker A, 

Broker B, Broker C and Broker D, including at least four accounts opened in his mother’s name 

and at least two other accounts that he opened using the identities of certain Tiger Wolf clients 

without their authorization. 

67. The non-Tiger Wolf brokerage accounts experienced net trading losses of more 

than $250,000. 

68. Finally, in selling interests in the Tiger Wolf Funds, Defendants made no effort to 

confirm clients’ income or otherwise assess whether clients qualified as accredited investors.  

For example, with multiple Tiger Wolf clients Mercado never discussed the term “accredited 

investor,” nor did Mercado ask them about their net worth or annual income. 

D.   Tiger Wolf Capital’s Collapse 

69. The Tiger Wolf Partnership Fund brokerage account at Broker A, which Mercado 

began using for certain client investments in August 2019, was open for approximately eleven 

months until Broker A closed the account in July 2020 after flagging it for what Broker A 

deemed to be impermissible advisory activity. 

70. Despite the closure of this account, Mercado continued soliciting new clients to 

invest in the Tiger Wolf Funds, while also soliciting existing clients to re-invest in one or more 

of the Tiger Wolf Funds without telling them that the lone brokerage account for any Fund had 

been closed and that the Tiger Wolf Funds had no other brokerage accounts under any Tiger 

Wolf Fund name. 

71. In total, approximately $1 million of the client funds raised by the Defendants 

were collected after Broker A closed the Tiger Wolf Partnership Fund brokerage account in July 

2020. 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 13 of 22



14 
 

72. Further, prior to his bankruptcy filing in December 2022, Mercado did not tell 

clients that he made losing investments with client funds in both the Tiger Wolf Partnership 

Fund and in separate non-Tiger Wolf brokerage accounts at Broker A, Broker B, Broker C and 

Broker D – including accounts in his mother’s name and in the names of certain Tiger Wolf 

clients whose identities Mercado had used without authorization in order to open accounts using 

their birthdates, names and other information, while also using his own email, phone number and 

bank accounts. 

73. The agreements between Tiger Wolf and its individual advisory clients were set 

for terms of limited duration, usually lasting one year or less.  Upon the end of the term, clients 

could redeem their interests in the Tiger Wolf Funds, or, as Mercado often successfully 

proposed, clients could re-invest or roll over their investment and any profits for another term. 

74. To encourage such re-investments, Mercado frequently crafted fictitious account 

statements or email updates to dupe investors into thinking that they were making profits. 

75. When Mercado was unable to convince a client to reinvest, Mercado would 

typically use incoming funds from new clients to make Ponzi payments in order to pay back 

previous clients, while describing the payments in communications to clients as Tiger Wolf Fund 

“profits.” 

76. In the final months of 2022, Mercado began to run out of money to make further 

Ponzi payments to Tiger Wolf clients. 

77. On December 22, 2022, Mercado filed a petition for Chapter 7 personal bankruptcy 

in the United States Bankruptcy Court for the Southern District of Florida.  However, Mercado then 

emailed certain Tiger Wolf clients on January 19, 2023, telling them that Tiger Wolf – the entity – 

had declared bankruptcy. 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 14 of 22



15 
 

78. Mercado then filed amended schedules on February 1, 2023, seeking to discharge a 

total of $644,099.68 in “business debt” that Mercado claimed that he owed to 31 creditors, who 

were, in reality, all clients of Tiger Wolf.  Five of the clients filed adversary complaints 

challenging Mercado’s bankruptcy, each claiming they were the victims of Mercado’s fraudulent 

investment scheme and arguing that Mercado’s debts to them should not be discharged. 

79. On September 7, 2023, the Bankruptcy Court issued an order denying Mercado a 

discharge under the Bankruptcy Code and, on April 26, 2024, the Bankruptcy Court issued its 

final decree, whereby the Trustee was discharged and the case was closed. 

80. Separately, in August 2023, Bank A terminated Mercado’s employment. 

81. During the Commission’s investigation that preceded the filing of this complaint,  

Mercado admitted in sworn testimony that he had lost clients’ money and had operated Tiger 

Wolf as a Ponzi scheme in which he used funds from new clients to pay back previous clients, 

disguising the payments as “profits.” 

82. Mercado explained that he made the Ponzi payments because “the company 

already started failing and individuals still believed in me, and I was afraid to let them down.  So 

instead of telling them that we were losing money, I just did not say that and just did what I did.”  

COUNT I –SECURITIES REGISTRATION VIOLATIONS 
 

Violations of Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and 77e(c)] 
 
83. Paragraphs 1 through 82 are hereby realleged and are incorporated herein by 

reference. 

84. From at least August 13, 2019, through February 1, 2023, Defendants Mercado and 

Tiger Wolf offered and sold securities. 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 15 of 22



16 
 

85. Defendants Mercado and Tiger Wolf used interstate transportation, communication 

or mails in connection with the offer and sale of securities. 

86. At the time of the offer and sale of securities, no registration statement was in effect 

as to the securities offered and sold. 

87. By reason of the foregoing, Defendants Mercado and Tiger Wolf have violated and, 

unless enjoined, will continue to violate Sections 5(a) and 5(c) of the Securities Act [15 U.S.C. 

§§ 77e(a) and 77e(c)]. 

COUNT II—FRAUD  
 

Violations of Section 17(a)(1) of the Securities Act [15 U.S.C. § 77q(a)(1)] 

88. Paragraphs 1 through 82 are hereby realleged and are incorporated herein by 

reference. 

89. From at least August 13, 2019, through at least February 1, 2023, Defendants 

Mercado and Tiger Wolf, in the offer and sale of the securities described herein, by the use of 

means and instruments of transportation and communication in interstate commerce and by use of 

the mails, directly and indirectly, employed devices, schemes and artifices to defraud purchasers of 

such securities, all as more particularly described above. 

90. The Defendants Mercado and Tiger Wolf knowingly, intentionally, and/or recklessly 

engaged in the aforementioned devices, schemes and artifices to defraud. 

91. By reason of the foregoing, the Defendants Mercado and Tiger Wolf, directly and 

indirectly, have violated and, unless enjoined, will continue to violate Section 17(a)(1) of the 

Securities Act [15 U.S.C. § 77q(a)(1)]. 

COUNT III—FRAUD  
 

Violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act 
[15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)] 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 16 of 22



17 
 

 
92. Paragraphs 1 through 82 are hereby realleged and are incorporated herein by 

reference. 

93. From at least August 13, 2019, through at least February 1, 2023, Defendants 

Mercado and Tiger Wolf, in the offer and sale of the securities described herein, by the use of the 

means and instruments of transportation and communication in interstate commerce and by use of 

the mails, directly and indirectly: 

  a) obtained money and property by means of untrue statements of material 

fact and omissions to state material facts necessary in order to make the statements made, in light 

of the circumstances under which they were made, not misleading; and 

  b) engaged in transactions, practices and courses of business which would 

and did operate as a fraud and deceit upon the purchasers of such securities, all as more 

particularly described above. 

94. By reason of the foregoing, the Defendants Mercado and Tiger Wolf, directly and 

indirectly, have violated and, unless enjoined, will continue to violate Sections 17(a)(2) and 17(a)(3) 

of the Securities Act [15 U.S.C. §§ 77q(a)(2) and 77q(a)(3)]. 

COUNT IV—FRAUD  
 

Violations of Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] 
and Rule 10b-5 thereunder  [17 C.F.R. § 240.10b-5] 

 
95. Paragraphs 1 through 82 are hereby realleged and are incorporated herein by 

reference. 

 96. From at least August 13, 2019, through at least February 1, 2023, Defendants 

Mercado and Tiger Wolf, in connection with the purchase and sale of securities described herein, by 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 17 of 22



18 
 

the use of the means and instrumentalities of interstate commerce and by use of the mails, directly 

and indirectly: 

 a) employed devices, schemes, and artifices to defraud; 

 b) made untrue statements of material facts and omitted to state material facts 

necessary in order to make the statements made, in light of the circumstances under which they 

were made, not misleading; and 

 c) engaged in acts, practices, and courses of business which would and did 

operate as a fraud and deceit upon the purchasers of such securities, all as more particularly 

described above. 

97. The Defendants knowingly, intentionally, and/or recklessly engaged in the 

aforementioned devices, schemes and artifices to defraud, made untrue statements of material 

facts and omitted to state material facts, and engaged in fraudulent acts, practices and courses of 

business.   

98. By reason of the foregoing, Defendants Mercado and Tiger Wolf, directly and 

indirectly, have violated and, unless enjoined, will continue to violate Section 10(b) of the Exchange 

Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. 

COUNT V—INVESTMENT ADVISER FRAUD  
 

Violations of Sections 206(1) and 206(2) of the Advisers Act 
[15 U.S.C. §§ 80b-6(1), (2)] 

 99. Paragraphs 1 through 82 are hereby realleged and are incorporated herein by 

reference. 

100. Defendants Mercado and Tiger Wolf were at all relevant times investment 

advisers within the meaning of Section 202(a)(11) of the Advisers Act [15 U.S.C. § 80b-

2(a)(11)]. 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 18 of 22



19 
 

101. From at least August 13, 2019, through February 1, 2023, Mercado and Tiger 

Wolf, directly or indirectly, by the use of the mails or any means or instrumentality of interstate 

commerce, while acting knowingly or recklessly: (a) have employed devices, schemes, or 

artifices to defraud one or more advisory clients and/or prospective clients; and (b) have engaged 

in transactions, practices, or courses of business which operated as fraud or deceit upon one or 

more advisory clients and/or prospective clients. 

102. By reason of the transactions, acts, omissions, practices and courses of business 

set forth herein, Defendants Mercado and Tiger Wolf have violated, and, unless enjoined, will 

continue to violate Sections 206(1) and 206(2) of the Advisers Act [15 U.S.C. §§ 80b-6(1), (2)]. 

COUNT VI—INVESTMENT ADVISER FRAUD ON  
POOLED INVESTMENT VEHICLE INVESTORS  

 
Violations of Section 206(4) of the Advisers Act 

[15 U.S.C. § 80b-6(4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8] 
 

 103. Paragraphs 1 through 82 are hereby realleged and incorporated herein by reference. 
 
 104. By engaging in the conduct described above, Defendants Mercado and Tiger Wolf, 

from at least August 13, 2019, through February 1, 2023, while acting as investment advisers to a 

pooled investment vehicle, by use of the means and instrumentalities of interstate commerce and of 

the mails: 

  a)  made untrue statements of material fact and omitted to state material facts 

necessary to make statements made, in the light of the circumstances under which they were made, 

not misleading, to investors and prospective investors in the pooled investment vehicles; and  

  b)   engaged in acts, practices, and courses of business that were fraudulent, 

deceptive and manipulative with respect to investors and prospective investors in pooled 

investment vehicles; all as more particularly described above. 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 19 of 22



20 
 

 105. By reason of the foregoing, Defendants Mercado and Tiger Wolf have violated and 

unless enjoined, will continue to violate Section 206(4) of the Advisers Act [15 U.S.C. § 80b-6(4)] 

and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8]. 

PRAYER FOR RELIEF  

WHEREFORE, Plaintiff Commission, respectfully prays that the Court: 

I. 

 Make findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil 

Procedure, finding that Defendants named herein committed the violations alleged herein. 

II. 

 Issue a permanent injunction enjoining Defendants Mercado and Tiger Wolf, and their 

agents, servants, employees, attorneys, and all persons in active concert or participation with them 

who receive actual notice of the order by personal service or otherwise, and each of them: 

 a.  from violating Section 5(a) and 5(c) of the Securities Act [15 U.S.C. §§ 77e(a) and 

77e(c)]; 

b.  from violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)]; 

 c.  from violating Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 

10b-5 thereunder [17 C.F.R. § 240.10b-5]; and 

d. from violating Sections 206(1), 206(2) and 206(4) of the Advisers Act [15 U.S.C. 

§§ 80b-6(1), (2), (4)] and Rule 206(4)-8 thereunder [17 C.F.R. § 275.206(4)-8]. 

III. 

As to Mercado, issue: (i) a conduct-based injunction permanently restraining and 

enjoining him from, directly or indirectly (including through any entity owned or controlled by 

Mercado), participating in the issuance, purchase, offer, or sale of any security (excluding the 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 20 of 22



21 
 

purchase or sale of securities for Mercado’s own personal account); and (ii) an officer and 

director bar; 

IV. 

 Issue an order directing Defendants Mercado and Tiger Wolf to pay disgorgement of all ill-

gotten gains or unjust enrichment and to pay prejudgment interest on the amount ordered to be 

disgorged, to effect the remedial purposes of the federal securities laws. 

V. 

Issue an order requiring Defendants Mercado and Tiger Wolf, pursuant to Section 20(d) of 

the Securities Act [15 U.S.C. § 77t(d)], Sections 21(d)(3) and 21A of the Exchange Act [15 U.S.C. 

§§ 78u(d)(3) and 78u-1], and Section 209(e) of the Advisers Act [15 U.S.C. § 80b9(e)], to pay civil 

monetary penalties. 

VI. 

 Issue an order that retains jurisdiction over this action in order to implement and carry out 

the terms of all orders and decrees that may have been entered or to entertain any suitable 

application or motion by the Commission for additional relief within the jurisdiction of this Court. 

VII. 

 Grant such other and further relief as this Court may deem just, equitable, and appropriate in 

connection with the enforcement of the federal securities laws and for the protection of investors. 

RESPECTFULLY SUBMITTED, 

     /s/Edward G. Sullivan 
     Edward G. Sullivan (GA Bar No. 691140) 

      Tel. (404) 842-7612 
      [email protected]  
 

     /s/M. Graham Loomis  
     M. Graham Loomis (GA Bar No. 457868) 

      Tel: (404) 842-7622 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 21 of 22

mailto:[email protected]


22 
 

      [email protected]  
 
      /s/Brian M. Basinger 
      Brian M. Basinger (GA Bar No. 595901) 
      Tel: (404) 842-5748 
      [email protected]  

 
 
COUNSEL FOR PLAINTIFF 
U. S. SECURITIES AND EXCHANGE COMMISSION 
950 East Paces Ferry Road, N.E., Suite 900 
Atlanta, Georgia 30326 

Case 3:24-cv-00514   Document 1   Filed 05/30/24   Page 22 of 22

mailto:[email protected]
mailto:[email protected]

	99. Paragraphs 1 through 82 are hereby realleged and are incorporated herein by reference.