ALISO VIEJO, Calif. -- The Securities and Exchange Commission has opened an investigation into an Orange County real estate lending company owned by the husband of a California state assemblywoman, it was reported Wednesday.
In an e-mail to his firm's roughly 3,000 investors, Point Center Financial Inc. President Dan J. Harkey disclosed that the SEC had subpoenaed records from the firm last week, the Los Angeles Times reported.
Harkey told The Times in an interview that the SEC is seeking thousands of pages of documents in connection with a $25 million investment pool that funded construction loans. He predicted the SEC would find no irregularities in his company's loan pool, noting the California Department of Real Estate took no action after a similar review.
There was no immediate SEC comment.
More than 50 Point Center investors filed a lawsuit against Harkey last week, accusing him of placing their money in risky construction loans and funneling profits to his wife's political campaigns.
In his interview with The Times, Harkey acknowledged many of his investors lost money but blamed it on the real estate downturn. About 60 percent of the company's loans are in default and interest payments to many investors have been reduced or suspended as a result, he said.
Assemblywoman Diane Harkey, R-Dana Point, said through a spokesman that she has no affiliation with Point Center and contributed her own money -- about $1.1 million -- to her campaigns.
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Aliso Viejo-based Point Center specializes in hard-money loans -- short-term, high-interest offerings to developers who often can't obtain funding from banks. Hard-money lenders require a large equity stake in the property for loans they issue.