Financial advisor from Lubbock faces more accusations in separate lawsuit

A financial scandal has rocked Lubbock, Texas, with financial advisors Mike Cox and Joshua Allen facing accusations of involvement in a multi-million-dollar Ponzi scheme. Initially named in several lawsuits alongside their company Ferrum Capital, Cox has since filed for bankruptcy, removing himself from legal proceedings.

Recent developments have shed light on another lawsuit targeting Joshua Allen. On top of his involvement with Ferrum Capital, Allen was also a franchise partner in Lubbock’s Walk On’s Bistreaux and Bar. In 2018, Allen and a business partner solicited investors to expand the franchise to other cities, with two investors eventually taking legal action. While Allen’s partner settled, the case against Allen will proceed to trial.

The introduction of Walk On’s Bistreaux and Bar to Lubbock in 2016 generated excitement within the community. However, allegations emerged in 2018 when Allen approached potential investors, like Chance Britt, about the opportunity to expand the franchise to Amarillo and El Paso. Despite Allen’s promising projections and local reputation, which included prior restaurant ventures that didn’t succeed, concerns began to surface.

Britt detailed his investment journey, mentioning collaborative reviews with his CPA, Tait Crow, revealing flaws in Allen’s investment approach. Regardless, Crow fell for Allen’s pitch and invested $150,000 of his own money, with Britt following suit, investing $600,000 based on Allen’s unfulfilled promises of doubling or even tripling their returns. The expected annual distributions of 12 percent failed to materialize, and investors faced a lack of financial transparency and required documentation, as per Texas and Federal laws.

The lawsuit also highlighted discrepancies within Allen’s tax returns, pointing to the mishandling of substantial amounts of investor money. Crow expressed frustration over the lack of crucial financial information, pointing to the misuse of funds allocated for promised investor distributions. Britt and Crow alleged significant financial losses as a result of Allen’s misleading representations and the mismanagement of investor funds.

The lawsuit’s detailed allegations brought to light a trail of broken promises and financial mismanagement, leading to severe repercussions for those involved. The case against Allen and his partners represents a cautionary tale of the importance of due diligence and the potential risks associated with investment opportunities that seem too good to be true. The community’s trust in financial advisors has been severely undermined, emphasizing the necessity for regulatory oversight and transparency in the financial services industry to prevent similar incidents in the future.