The right standard was used, and the jury got the right instructions when it convicted Joshua Allen on three counts of conspiracy and one count of securities fraud, according to federal prosecutors.
Joseph Blackwell, assistant U.S. attorney, wrote a response opposing a new trial for Allen – who along with Michael Cox was convicted on August 18 in San Antonio.
Allen filed his request Tuesday – claiming the jury was given incorrect instructions. More specifically, the jurors were given the wrong standard for what a security is. We covered his request here.
Allen and Cox co-founded Ferrum Capital in 2017. They were indicted in 2025 along with their San Antonio business affiliate Brooklyn Willy. Ferrum was used to conduct a Ponzi scheme, according to court records and official statements by federal officials.
Hundreds of people, many from the Lubbock area, lost millions of dollars. Numbers varied in court records, but the indictment said people put more than $67 million and most lost everything. For some of the victims, the investment was their retirement or their life savings.
Allen and Cox pleaded not guilty and their attorneys argued at trial that they did nothing wrong.
Blackwell wrote in response to Allen that “Investments in Ferrum Capital were securities in the form of investment contracts.”
“… The investors invested money in a common enterprise and were led to expect profits,” Blackwell also wrote.
Blackwell went on to write that Allen’s defense “misunderstands” the correct legal standard.
“The jury was rightly instructed that investment contracts are securities and instructed on the definition of an investment contract. The jury found the investments into Ferrum Capital were securities because they met the definition of investment contracts….”
Given the two legal standards in Allen’s request, prosecutors actually held themselves to the higher standard, according to Blackwell’s response.
“The jury agreed. Their decision should not be disturbed,” Blackwell concluded.
U.S. District Judge Fred Biery has not yet made a ruling.
Allen, Cox, Willy, and Willy’s friend Paula Vacek are all scheduled for sentencing in December.
Click here to see our ongoing coverage of Ferrum Capital including daily reports from the trial which led to the conviction.
