Ferrum Capital Lawsuit 2021 [2021] Jun 2026

Ferrum Capital was founded in 2017 by Lubbock, Texas businessmen and Michael Cox . Operating through several sequential entities—including Ferrum Capital, Ferrum II, Ferrum III, and Ferrum IV—the firm pitched high-yield promissory notes to retail investors, many of whom were retirees looking for stable returns.

Ferrum Capital, a financial services company, was accused of misconduct by a group of investors, leading to the filing of a lawsuit in 2021. The lawsuit alleges that Ferrum Capital engaged in deceptive business practices, resulting in substantial financial losses for the plaintiffs.

Litigation finance agreements depend entirely on lien priority. Ferrum argued that the defendant had taken out a secondary, undisclosed loan from another funder on the same settled case. When the settlement funds were distributed, the secondary lender was paid first, effectively subordinating Ferrum’s lien without their consent. This, Ferrum claimed, constituted with their contractual rights. ferrum capital lawsuit 2021

The 2021 Ferrum Capital lawsuit stemmed from a entered into sometime in late 2019 or early 2020. While the full details of the non-disclosure agreement (NDA) involved restrict public access to some specifics, court records (primarily filed in New York State Supreme Court and the U.S. District Court for the Southern District of New York ) reveal the following:

The courts were tasked with untangling the financial mess to determine who actually owned the rights to the loans Ferrum had originated. For the plaintiffs (the investors), the goal became recovering whatever assets remained, often through the foreclosure of properties Ferrum held interests in. Ferrum Capital was founded in 2017 by Lubbock,

For instance, a Wisconsin plaintiff with severe cognitive difficulties was induced to invest , followed by another $1 million in June 2021 . Like hundreds of others, this investor never received their principal back. Over its operational lifespan, the various entities managed to draw between $67 million and over $100 million from more than 400 retail investors, many of whom were elderly retirees.

The "Ferrum Capital lawsuit 2021" is not defined by a single filing in that year, but by a critical nexus of events that year. It was the year a Wisconsin investor gave $2 million to the company, the year a financial advisor for Ferrum stole a couple's $500,000 investment for personal use, and the year a federal judge sent the man whose fraudulent business model Ferrum allegedly copied to prison for 35 years. When the first major class action lawsuit was filed in Bexar County, it referenced these 2021 events as part of a pattern of fraud that spanned years. As criminal cases proceed and civil lawsuits grind through the courts, the story of Ferrum Capital stands as a stark warning about the dangers of unregulated investment schemes and the trust placed in charismatic financial advisors—a scheme whose true scope was first revealed by the events of 2021. The lawsuit alleges that Ferrum Capital engaged in

: Lawsuits later detailed that by June 2021, some individual investors—including those with cognitive difficulties—were still being encouraged to invest millions despite the scheme's mounting instability.