United States Securities and Exchange Commission v. Phoenix Asset Group

Background

The Securities and Exchange Commission brought securities-fraud claims against Robyn A. Bowman and Phoenix Asset Group, LLC. Bowman owned Phoenix, which bought, sold, and managed portfolios of distressed debt. From 2018 to 2020, Phoenix sold at least 45 promissory notes totaling more than $4.48 million to 34 investors.

The Commission’s complaint alleged that Bowman and Phoenix made misleading statements about how investor funds would be used, the safety of the investments, the vetting and insurance of collection agencies, audits of investor accounts, compliance with regulations, and Phoenix’s history of consumer-protection lawsuits. The complaint also alleged that Bowman mixed personal and business funds and used Phoenix’s account for personal expenses.

The parties later entered a consent judgment, approved on March 14, 2025. The judgment permanently barred the defendants from engaging in securities fraud and required them to pay disgorgement, prejudgment interest, and civil penalties. The defendants agreed that the complaint’s allegations would be accepted as true for purposes of deciding the financial remedies and that the court would determine the amounts after a Commission motion.

Disgorgement

Disgorgement requires a defendant to give up unjust enrichment. The Commission sought $3,026,504, calculated as the money investors provided to Phoenix minus the money Phoenix returned to them. The court found that this was a reasonable approximation of the defendants’ unjust enrichment.

The defendants argued that investors contributed less than the Commission claimed and that the unreturned funds represented business losses rather than profits. They also sought deductions for various payments, including additional alleged repayments to investors, payments to Bowman’s mother, wages to family members, payments to a bookkeeper, an alleged embezzlement, an Arizona condominium, credit-card charges, investments in other ventures, and Bowman’s claimed executive compensation.

The court rejected these arguments. It found that the defendants had not shown that any of the claimed amounts were legitimate business expenses. The court also found that the defendants’ commingling of personal and business funds supported joint and several liability. As a result, Phoenix and Bowman were ordered to pay $3,026,504 in disgorgement together, with each liable for the entire amount.

Prejudgment Interest

The consent judgment required prejudgment interest to be calculated from March 1, 2020, using the federal tax-underpayment rate identified in 26 U.S.C. § 6621(a)(2). Because the defendants challenged only the underlying disgorgement amount and not the interest calculation, the court ordered them to pay $916,072 in prejudgment interest jointly and severally.

Civil Penalties

The court applied the highest statutory penalty tier because the violations involved fraud and caused substantial investor losses. It considered the conduct’s seriousness, the defendants’ knowledge, the losses or risks to investors, the repeated nature of the conduct, and the defendants’ financial condition.

The court found that the conduct was egregious and recurring, involved knowingly or recklessly false statements, and affected 34 investors over more than two years. The court also considered Bowman’s unemployment, Phoenix’s lack of current revenue, the permanent restriction on Bowman’s participation in securities transactions, and the possibility—but uncertainty—of recovery from other lawsuits.

The court imposed a $200,000 civil penalty on Bowman and a $1,000,000 civil penalty on Phoenix. It found these amounts were below the applicable maximums but sufficient to punish the defendants and deter future securities-law violations.

Order

The court granted the Commission’s Motion for Financial Remedies. Phoenix and Bowman must pay the disgorgement and prejudgment interest within 30 days after entry of the Final Judgment. Phoenix must separately pay the $1,000,000 civil penalty, and Bowman must separately pay the $200,000 civil penalty. The Commission may use lawful collection procedures, and the court retained jurisdiction to enforce the judgment and oversee any distribution of collected funds.