Partners Drain $33 MILLION, Lie About Profits, Investors Fooled!

U.S. Securities and Exchange Commission Litigation Release No. 26419, dated November 18, 2025.

The SEC charged the co-founders of 777 Partners LLC and 600 Partners LLC, along with their former CFO and the companies themselves, with defrauding investors in a $237 million preferred equity offering. Defendants allegedly lied about the companies' financial health, claiming substantial profits and a 10% annual dividend, when in reality, the companies faced a severe liquidity crisis due to a $300 million credit facility overdraw. Some investor funds were also allegedly diverted for personal use.

In Plain English

Imagine you're saving up for a big trip and someone promises you a great return on your savings. They tell you they're making tons of money and can pay you 10% interest every year. But secretly, they've gotten into a huge debt problem, like overspending way over their credit limit by $300 million! They didn't tell you this and kept asking for more money, hoping to fix their mess. To make things worse, they even took some of your savings for themselves. The SEC stepped in because this wasn't a fair deal; they lied about how much money they really had.

Disclaimer: all facts are drawn from the SEC's own filings; the claims described are allegations unless and until a court rules or the parties settle, and some cases end in dismissal.

How the Alleged Scheme Worked

1. Founding and Managing Companies Joshua Wander and Steven Pasko co-founded and managed 777 Partners LLC and 600 Partners LLC as a unified business. Damien Alfalla served as the Chief Financial Officer (CFO) for both entities.
2. Launching a Preferred Equity Offering Between January 2021 and May 2024, the companies launched a preferred equity offering, jointly issued by 777 Partners and 600 Partners, aiming to raise capital from investors.
3. Misrepresenting Financial Health Defendants allegedly misled investors by falsely representing that the companies were earning, and would continue to earn, substantial positive net income sufficient to pay investors a 10% annual dividend.
4. Concealing a Severe Liquidity Crisis In reality, the companies were in a severe and worsening liquidity crisis and had no realistic prospects of earning the net income needed to pay the promised dividends.
5. Misusing a Credit Facility The dire financial situation stemmed from the misuse and a $300 million overdraw of a credit facility, which damaged the companies' financial prospects and violated the facility's terms.
6. Directing and Concealing the Overdraw Wander directed the misuse of the credit facility and its concealment from the lender, with Alfalla assisting in these activities.
7. Signing False Compliance Reports Pasko, who was also CEO of SuttonPark (a key subsidiary), allegedly signed false and misleading Credit Facility compliance reports transmitted to the lender without verifying their accuracy, despite knowing or should have known about the overdraw.
8. Making False and Misleading Representations Wander and Alfalla allegedly made false and misleading statements to investors about the companies' prospects and their ability to pay dividends, while hiding the $300 million overdraw and its causes.
9. Diverting Investor Funds Wander also allegedly misled investors about the use of offering proceeds, diverting approximately $33 million of investor funds for his and Pasko's personal benefit.
10. Incorporating False Information into Agreements Pasko signed all investor subscription agreements, which contained false and misleading representations about the companies' financial prospects, even though he knew or should have known about the credit facility overdraw and its negative impact.

The Enforcement Action

On October 16, 2025, the Securities and Exchange Commission charged Joshua Wander, Steven Pasko, Damien Alfalla, 777 Partners LLC, and 600 Partners LLC with defrauding investors in a $237 million preferred equity offering. The SEC alleges that the defendants misled investors about the companies' financial condition and ability to pay a 10% annual dividend, when in fact the companies were facing a severe liquidity crisis due to a $300 million credit facility overdraw. The complaint further alleges that Wander and Alfalla misused the credit facility and concealed the overdraw, while Wander also diverted approximately $33 million of investor funds for personal use. The SEC's complaint, filed in the U.S. District Court for the Southern District of New York, charges violations of federal securities laws and seeks injunctive relief, disgorgement plus prejudgment interest, and civil penalties. In parallel actions, the U.S. Attorney’s Office for the Southern District of New York announced criminal charges against Wander and Alfalla.

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