A general partner in a real estate investment fund agreed to pay $400,000 to settle allegations it failed to register the fund and take reasonable steps to verify investors were accredited, the Securities and Exchange Commission (SEC) announced Wednesday.

PIC Renegade Properties raised more than $54 million from 140 investors for the PICR Fund III between mid-2015 to 2019, the SEC said. Renegade solicited investors through a website, YouTube videos, and a press release.

Renegade advertised the funds would be used to buy and renovate single-family homes and then to rent or resell them for profits, the SEC alleged in its order.

However, it never registered the fund with the SEC “in any capacity,” the agency alleged.

The fund instead relied on a registration exemption, which required potential investors be accredited. Renegade did not qualify for that exemption because it did not accredit the investors, according to the SEC.

Renegade also failed to verify the investors had enough income, net worth, or assets to be accredited, the SEC alleged. The fund advertised $500,000 was the minimum subscription amount it would accept, but it accepted as little as $29,000, the SEC alleged.

Renegade didn’t always obtain financial information or documents from potential investors on which accreditation could be based, the SEC said.

And in some cases, Renegade ignored the financial information it received from investors that clearly showed they should not invest, the SEC alleged. This meant Renegade sold securities to someone who invested using their retirement funds and to a trust created to care for an elderly person, the SEC said.

“The unpredictable nature of the investments and risk of potentially significant losses underscored the risks from failing to verify all investors were accredited,” the SEC said.

After the SEC began investigating the fund in 2019, the fund retained a third party to conduct accreditation of new investors. In September 2021, the fund stopped raising money and distributed money back to investors, the SEC said.

Renegade violated the registration provisions of the Securities Act, which requires that a registration statement be filed with the SEC to sell and offer securities.

In addition to the penalty paid, Renegade agreed to a cease-and-desist order.

The company could not be reached for comment.

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