National (June 26, 2023) – Patrick Horsman, Managing Partner and Co-Founder of Coral Capital, an alternative investment platform focused on digital assets and decentralized finance applications, has been accused of fraud and unjust enrichment in a class-action lawsuit filed by Zigler Law Group.
The 104 page class-action lawsuit, filed on behalf of investors who lost money in an alleged cryptocurrency scam, alleges that Horman and his business partner defrauded investors in the “LGBCoin crypto pump-and-dump scheme” and attempted to hide their role through a complex web of transactions.
Pump-and-dump schemes involve fraudsters who typically spread false or misleading information to create a buying frenzy that will pump up the price of a stock and then dump shares of the stock by selling their own shares at the inflated price.
According to the lawsuit, the LGBCoin is a cryptocurrency co-created by Horsman and his business partners that is a blockchain-based digital asset known as “ERC-20 tokens,” created using the Ethereum blockchain. The LGBCoin was primarily traded against Ether, the native currency of the Ethereum blockchain network onUniswap, Binance, Coinbase, and other decentralized exchanges that allow anyone to list a token.
The complaint alleges that Letsgobrandon.com Foundation, LGBCoin, Ltd, Koutoulas, and Horsman of Coral Capital sought to capitalize on the publicity surrounding the “Let’s Go Brandon” chant and conspired to violate provisions of the Securities Act and its Florida State law analog by selling the unregistered LGBCoins.
In addition, the complaint alleges that Horsman (and his business partners) solicited sales of LGBCoins by making false and misleading statements concerning NASCAR’s approval of the LGBCoin sponsorship of Brandon Brown, the digital asset’s growth prospects, and financial benefits for LGBCoin investors, as well as using celebrity promoters to lure in unsuspecting investors so that Horsman and other insiders could sell the unregistered LGBCoin securities in violation of federal and state securities laws.
The action was filed in the U.S. District Court for the Middle District of Florida and captioned De Ford et. al. v. Koutoulas et al., Case No. 6:22-cv-652, asserts claims under § 12(a)(1) of the Securities Act of 1933 (the “Securities Act”) and under §517.07 of the Florida Securities and Investment Protection Act for the sale of unregistered securities, as well as other Florida State law claims (including conspiracy, unjust enrichment, negligent misrepresentation, and promissory estoppel), on behalf of investors who purchased the LGBCoin unregistered securities, which were sold as LGBCoins on various cryptocurrency exchanges from November 2, 2021 through March 15, 2022. On January 5, 2022, NASCAR announced it would not approve LGBCoin’s sponsorship of NASCAR driver Brandon Brown. In the wake of this news, the price of LGBCoin fell to Class Period lows.
Though this isn’t the first time that Horman has been accused of fraud, this is by far his most high-profile accusation to date. According to Horsman’s personal LinkedIn profile, the self-proclaimed “serial entrepreneur and investor” is still a Managing Partner at Coral Capital in San Juan, Puerto Rico.
Who Is Patrick Horman?
Horsman was born in St. John, Nebraska and grew up in Halifax, Nova Scotia. He and his family moved to Scottsdale, Arizona when he was fifteen. Horsman attended Desert Mountain High School in Scottsdale where he played on the Basketball, Golf, Track and Cross-Country teams. He graduated from Desert Mountain in 1998.
After high school, Patrick attended the University of Arizona, where he graduated Magna Cum Laude in 2002 with a triple major in finance, accounting and entrepreneurship.
After graduation, Horsman co-founded Blue Sands Securities with his business partner, Michael Cooney. The company was created to serve as a placement agent for alternative investment funds, raising over $15 billion from institutional investors. The company was the first business he launched after college, as well as Horsman’s first encounter with accusations of fraud.
Allegations were made against Horsman while at Blue Sands Securities alleging negligent misrepresentation, breach of implied covenant of good faith, unjust enrichment and fraud. He was permitted to resign from the organization, though he faced disciplinary actions.
In March of 2017, Horsman consented to sanctions and to the entry of findings that he purchased shares in eleven initial public offerings (IPOs) in three personal brokerage accounts held at three FINRA member firms.
The findings stated that FINRA rules prohibit a person associated with a member from purchasing a new issue in any account in which such person associated with a member has a beneficial interest. The findings also stated that Horsman orally disclosed four outside brokerage accounts to his member firm, but he failed to promptly notify the firm of the accounts in writing. Horman was fined and suspended accordingly.
Horssman received attention again in 2020 when a lawsuit alleged that he had lied about the prospects of the investment of his cannabidiol company, Integrated CBD. Further, the lawsuit claimed that Horman used an emergency pandemic-relief loan (Paycheck Protection Program) to buy a private jet and fund other lavish expenses, despite having laid off the company’s staff.
Integrated AG, the Horman-founded parent company of Integrated CBD, filed for Chapter 11 bankruptcy protection on January 20, 2021, and disclosed over $20 million in outstanding debt, the Phoenix Business Journal reported.
The full list of companies that Horman is publicly affiliated include:
- Coral Capital
- Horsman Holdings
- Octopus Investments
- Merion Investment Management
- The Arizona Coyotes (NHL hockey team)
- Innovation Shares
- Integrated AG
- Blue Sand Securities
- Cashmere Capital
- Verified Organic
- Safe Shepherd
- Bay Front Development
- Integrated CBD
Media Contact
Rich Williams
T: 702-613-0824
