The Securities and Exchange Commission (SEC) charged private investment firm ARO Equity LLC, as well as its principals, Thomas Renison and Timothy Allcott, with fraud, according to a litigation release issued on January 8, 2020. The SEC barred Thomas Renison from the securities industry in July 2014. However, the SEC alleges that Thomas Renison did not abide by this bar. Instead, he, along with Timothy Allcott, allegedly founded ARO Equity in July 2015. From July 2015 to June 2018, the pair allegedly raised $6 million from 15 investors by making misrepresentations to primarily elderly investors.
ARO Equity
The SEC alleges that Thomas Renison and Timothy Allcott exaggerated the success of ARO Equity in order to entice potential investors. The pair allegedly encouraged seniors to cash out their retirement products and instead invest in ARO Equity. Once Thomas Renison and Timothy Allcott launched ARO Equity, their investments—in medical clinics, military contractors, and an electrical company— started to fail. But instead of telling these vulnerable investors the truth, they allegedly made misrepresentations, falsely touting the success of the fund. They allegedly even told investors that the vulnerable investors’ money was as secure as if it had been deposited in a bank. They told investors that ARO Equity had double-digit returns. In reality, however, according to the SEC, that was far from the truth; ARO Equity had suffered significant losses. So Thomas Renison and Timothy Allcott used money from new investors to pay interest to earlier investors—one of the hallmarks of a Ponzi scheme.

The SEC’s complaint, filed in the United States District Court for the District of Massachusetts, provides more information on how this alleged scheme allegedly unraveled. Who are Thomas Renison and Timothy Allcott? From 1990 to 2010, Thomas Renison was affiliated with a string of broker-dealers. In 2012, the Maine Office of Securities barred him from selling securities in Maine after finding that he defrauded investors by selling promissory notes to help fund a phony European casino. Before getting involved with ARO Equity, Timothy Allcott had weathered unemployment and had managed a billiards hall and a motel. Timothy Allcott ran ARO Equity—which characterized itself as a “private investment firm”—out of his Massachusetts home. Because the SEC had barred Thomas Renison from the securities industry, Timothy Allcott and Thomas Rension allegedly conspired to conceal Thomas Renison’s ownership stake in ARO Equity.
ARO Equity issued promissory notes with a maturity date of three to five years, guaranteeing investors an 8% to 12% interest rate. One woman invested her entire $1 million inheritance with ARO Equity because Remison had been her parent’s financial advisor. In reality, ARO Equity invested the investors’ money in small businesses that had yet to turn a profit—and indeed, never became profitable. ARO Equity invested more than $1.3 million in a Massachusetts electrical company but only managed to recover approximately $16,000. They also invested in a military contractor based in Massachusetts, along with a chain of walk-in medical clinics in Connecticut. In total, ARO Equity allegedly poured $3.4 million of vulnerable investors’ money into these three ill-fated projects and only managed to recover around $480,000. All in all, ARO Equity allegedly lost around $5 million, leaving them with no funds with which to pay back the vulnerable investors.

The SEC alleges that Thomas Renison, Timothy Allcott, and ARO Equity LLC violated the following federal laws:

The SEC is also seeking a court order that would require Renison to comply with the SEC’s 2014 bar.
If you invested with ARO Equity LLC and would like to learn more about this case, please don’t hesitate to contact the securities attorneys of Fitapelli Kurta. Call (877) 238-4175 or email for your free case consultation.