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The Utah Division of Securities has issued an emergency cease-and-desist order to Lehi-based Hedgehog Investments, LLC, following allegations that the company and its subsidiaries were not licensed to sell securities and had been operating a classic Ponzi scheme, which has cost investors their funds. Because the Director believes their continued operation would be a “significant danger to public welfare,” the Division issued the emergency order.
The companies were never licensed to sell securities, and the securities themselves were not registered or legal. The state of Utah claims that all funds were acquired illegally. The order forced the company to stop conducting business, but has also left investors without their money. The most recent investor solicitation was in January 2025. Many believe they will never see their money again.
Through a series of different entities, Hedgehog sought investors who were interested in higher rates of return with alleged investments into “young, promising companies” that were allegedly vetted and found to be profitable. Investors were told that their funds would be used to conduct two transactions per year for a one-year note and five transactions for a two-year note. In some cases, investors were promised as much as a 49% return. These statements were later found to be inherently untrue.
Despite assurances from the operators, no companies were vetted, and there were no real returns. When pressed, the operators declined to provide information on the companies they were helping to fund, citing “intellectual property” and “client confidentiality.”
The company owners misappropriated investor funds, and prior investors’ “dividends” were paid from new investor funds in characteristic Ponzi style. In addition to enriching himself, Vigil spent investors’ money on paying older investor debts and “dividends.” None of the investors’ funds ever generated any dividends, according to the Division’s investigation.
Once invested, the investors received “account statements” that show significant gains as described in their contracts. Investors are advised to “roll over” their principal and interest into new notes instead of taking payments when the original notes are supposed to mature. However, none of the investors interviewed by the Division had either withdrawn any of their dividends or verified their accounts’ values beyond what they found in the company’s online account portal.
These companies, according to the order, had no legitimate business model or income to pay the investor’s dividends, the high alleged rate of interest, or repay the millions to people who invested in their promissory notes. Instead, the monies are used for personal expenses, or to pay prior investors their owed “dividends.”
Additionally, both Bates and Vigil have criminal histories that were not disclosed to investors. Bates is a convicted felon and a registered sex offender, and Vigil has an extensive criminal history that includes DUI, criminal trespass, assault, robbery, and a conviction for attempted communications fraud related to a fraudulent bank loan scheme. Vigil is also on Utah’s “Buyer Beware” listing following a previous cease and desist order related to a failed refund for a customer who purchased his alleged credit repair services. Using investor funds, Vigil misappropriated the funds for personal expenses such as purchases of furniture and vehicles, as well as payments to his criminal defense attorney.
The Division can schedule a hearing to discuss the order by written request from the respondents, but it has not yet done so.
Although this case could also involve the US Securities and Exchange Commission, a spokesperson for the SEC has neither confirmed nor denied that they are preparing or conducting a federal investigation into Hedgehog Investments, LLC, and its affiliates.
The Utah Division of Securities’ petition names these defendants:
Silver Law Group represents investors in securities and investment fraud cases. Our lawyers are admitted to practice in New York and Florida and represent investors nationwide to help recover investment losses from stockbroker misconduct. If you have any questions about how your account has been handled, call to speak with an experienced securities attorney. Most cases are handled on a contingent fee basis, meaning that you won’t owe us until we recover your money for you. Contact us today at (800) 975-4345, and let us know how we can help.
