: Promoters failed to disclose that they were taking high commissions—often 8% —and that the investment notes were not registered with state or federal regulators. Key Figures & Criminal Charges
Rather than being invested as promised, new investor funds were used to pay "returns" to previous investors—a classic Ponzi characteristic—while the rest went toward the personal expenses of the owners and their associates.
The legal battles in 2021 marked the beginning of the end for Ferrum Capital Partners as a major player in the bridge financing space. The litigation revealed the firm's precarious financial position.
and San Antonio federal court, accuse the defendants of defrauding over 400 investors of between $67 million and $100 million Federal Indictments (2025) Joshua Allen Michael Cox Brooklynn Chandler Willy
Beyond the warning of Bank's conviction, 2021 also saw Ferrum Capital actively raising and misappropriating investor funds. A lawsuit filed on behalf of a Wisconsin plaintiff in 2025 details that two of the victim's largest investments were made in 2021 with funds from a man who had recently suffered a stroke and was having cognitive difficulties. The lawsuit claims that in January and June of 2021, the plaintiff invested a total of $2 million in promissory notes issued by a Ferrum entity. The court documents allege that the plaintiff "has never received any return of his principal or interest payments".
For the elderly Wisconsin plaintiff whose investment in early 2021 first signaled the fraud to come, the path to recovery remains uncertain. But the lawsuit he and others have filed — along with the FBI investigation, the criminal indictments, and the ongoing receivership — offers the possibility of accountability and, perhaps, some measure of justice.
This article provides a comprehensive analysis of the 2021 lawsuit involving Ferrum Capital, including the parties involved, the core allegations, the legal arguments, and the eventual outcome of the case.
The legal proceedings surrounding and its principals, Joshua Allen and Michael Cox
The remains a seminal case in the alternative finance and legal funding sector. While the confidential settlement prevented a definitive appellate ruling on the usury versus investment question, the case produced several concrete takeaways:
Joshua Allen and Mike Cox founded Ferrum Capital in 2017. Operating through multiple entities—including —the firm pitched a highly secure, high-yield opportunity to everyday investors.
Adkins invested nearly $500,000 — about 20 years of his savings. He was promised $615,000 by October 2024. He never received a dime.
Collins Asset Group, meanwhile, filed for bankruptcy in Delaware, prompting concerns from victims' attorneys that the proceedings would move to Delaware — a move they described as "right out of the Ponzi scheme playbook". In a favorable ruling for victims, however, Delaware bankruptcy Judge Laurie Selber Silverstein transferred the Collins Asset Group bankruptcy to Texas.
, center on allegations of a massive Ponzi scheme that defrauded hundreds of investors of millions of dollars. While the legal battle escalated significantly in 2024 and 2025 with federal indictments and high-profile bankruptcies, the roots of these issues involve financial activities and specific investment transactions occurring in . The 2021 Legal Context and Foundations
Enter Ferrum Capital. According to the complaint filed in June 2021, Ferrum agreed to provide a massive $35 million PIPE investment. In exchange, Hightower made a critical concession: they agreed to pay Ferrum a if the merger failed to close by a specific drop-dead date.
