Regulators in Colorado have filed a lawsuit against a restaurant group and a broker, alleging that they misled investors and duped them out of $380,000 after floating a nationwide expansion plan for a fast-casual Indian restaurant chain. The lawsuit alleges that the defendants used ‘half-truths and lies’ to convince investors to buy into a plan for a vast franchise network, promising returns as high as 2,900% and guaranteed quarterly dividends of 8%. However, after the sole Saucy Bombay location closed in 2015, the defendants allegedly continued seeking investments without disclosing the closure. None of the 17 investors received any dividends, and the state alleges that the restaurant group never intended to franchise the restaurant and instead used investor money for operating costs and other expenses. The lawsuit accuses the defendants of violating state securities laws by misleading investors, selling unregistered securities, and, in one case, selling securities without a license.
