Grewal Philly cash advance-backer sold unregistered securities in NJ

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CBSG was using the investment dollars – $90 million nationwide between April 2016 and December 2017 – to finance PAR Funding, which provides cash advances to small businesses.

Cash advances are a controversial practice, often grouped together with payday loans, in which borrowers use credit for immediate cash withdrawals at the cost of high interest rates. The practice has often been condemned as “predatory lending.”

On Thursday, the Bureau of Securities, part of the OAG, issued a cease and desist letter to CBSG, saying the company violated New Jersey securities laws by offering and selling unregistered securities to investors.

The OAG also said the people selling CBSG’s securities were not registered to do so in the state of New Jersey – in November, CBSG was ordered to pay $490,000 to the Pennsylvania Department of Banking and Securities over similar violations.

In its Thursday statement, the OAG likened the practice and the industry to “financial predators.”

“The bureau’s action today puts cash advance companies on notice that we are watching closely,” Attorney General Gurbir Grewal said in a statement. “We will enforce all laws at our disposal to protect consumers, as well as investors, from falling victim to financial predators in this industry.”

Representatives from CBSG did not immediately return requests for comment.