SEC ends probe into John Ruiz’s Gables company, firm says; NASDAQ issues remain
University of Miami booster John Ruiz’s insurance claims company said Monday the Securities and Exchange Commission has concluded a three-year investigation into the company and doesn’t intend to take legal action against the company, Ruiz or any of the company’s other officers.
The SEC had been investigating Ruiz’s Coral Gables-based company, MSP Recovery, since August 2022 over a host of issues, including the company’s projected financial results to investors. SEC investigators had also been focusing on the algorithms that power the company’s business of finding insurance claims that have been paid by the wrong party and seeking payment from the party that should have paid in the first place.
As recently as this summer, four officers of the company had received additional subpoenas from the financial regulator requesting materials as part of the investigation.
READ MORE: SEC seeks records from officers of John Ruiz’s company in probe
But the company said that it received a letter from the SEC on Friday, Dec. 5, indicating that the agency had concluded its investigation of MSP Recovery “without intention to recommend an enforcement action against the Company or its officers,” according to an SEC financial filing by the company on Monday.
MSP Recovery declined to provide more detail about the SEC’s findings or provide the Herald a copy of the letter, referring the Herald to the company’s public filings. The SEC also declined to comment or provide a copy of the letter.
The company has also received numerous subpoenas from the U.S. Attorney’s Office for the Southern District of Florida since 2023 in connection with a grand jury investigation in Miami. The company didn’t say anything about the status of that investigation.
Ruiz rose to prominence thanks to the millions of dollars his company, at the time known as LifeWallet, spent to endorse University of Miami student athletes through name, image and likeness, or NIL, deals, which became legal in 2021. Ruiz also pledged to build the university’s football team a new stadium, which has not come to fruition.
The Miami Herald first reported in 2023 that Ruiz’s company and Ruiz were being investigated by the SEC and the U.S. Attorney’s Office for the Southern District of Florida. The company publicly disclosed the investigations following publications of the Herald’s reporting.
READ MORE: ‘Red flags on top of red flags’: Problems mount for UM athletics booster John Ruiz
Issues over NASDAQ stock listing
The letter from the SEC comes days before MSP Recovery is scheduled to meet with a NASDAQ hearings panel to discuss two separate determinations that the company is not in compliance with requirements to continue to have its stock listed on the NASDAQ Capital Market.
The NASDAQ listing staff determined that the company’s stockholders’ equity as of the end of last year was below the required minimum of $2.5 million and that the company’s stock price had been below the required $1 minimum price for 30 consecutive days. The stock closed on Friday, Dec. 5, at $0.32.
When the company first went public in May 2022, it was valued at more than $32 billion, but it has struggled to meet the lofty financial projections the company forecast at the time of its launch.
In a May 2022 letter to stockholders, the company that brought MSP Recovery public shared projections showing that MSP would collect more than $6 billion in revenue in 2025 from its primary business of recovering wrongfully paid insurance claims, netting the company more than $4.3 billion after taxes.
For the first nine months of this year, the company reported $1.57 million in revenue, less than one-fifth of the $10 million in revenue the company reported in the first nine months of 2024, according to an SEC quarterly filing in November.
Instead, the company said in the latest quarterly filing that it had accumulated a “deficit” of $878.6 million through the end of September.
Although the SEC chose not to pursue legal action against MSP Recovery, the company has encountered lawsuits brought by investors and others.
One of the company’s earliest funders sued Ruiz and MSP Recovery co-founder Frank Quesada, a former Coral Gables city commissioner, in late September. The Miami investment firm Brickell Key Investments accused Ruiz and Quesada of misstating their ownership of $36 million worth of shares they had pledged in September 2022 as collateral to reduce $140 million in debt the company owed the investment firm, according to a lawsuit.
Brickell Key Investments seeks $63 million in outstanding debt and $36 million in damages from the pair.
