Notable litigation filed during August 2023 includes: (1) SEC v. Rocha; (2) Legum v. Garfinkel, et al.; and (3) SEC v. Conn. Jr.
SEC v. Rocha, No. 1:23-cv-11779-LTS (D. Mass.)
The SEC filed suit against the schemer defendant for losses arising from an alleged Ponzi wherein the defendant promised to invest the victims' money in securities that would provide 12% monthly investment returns, only to then use the victims' money to fuel his gambling habit and luxurious lifestyle. After the defendant lost the remainder of the victims' money through personal investment losses, he started using later investor funds to make Ponzi payments to earlier investors. The SEC alleges violations of the Securities Act of 1933, the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and the Investment Advisers Act of 1940.
Legum v. Garfinkel, et al., No. 2:23-cv-06392 (E.D.N.Y.)
Ponzi victims filed suit against schemer defendants for losses arising from an alleged Ponzi scheme run through purported investment entities Emerald Oak Capital, LLC and 5G Funding, LLC (collectively, "Ponzi Entities"). The complaint alleges that the defendants solicited investments into the Ponzi Entities by promising to use investor money to purchase receivables. Instead, portions of the victims' investments were used to fund the defendants' gambling habits and lavish lifestyles, while other of the victims' investments were used to make Ponzi payments to earlier investors. Plaintiff seeks recovery under theories of RICO participation and conspiracy, common law conversion, and common law fraud.
SEC v. Conn, Jr., No. 1:23-cv-03830 (N.D. Ga.)
The SEC filed suit against the schemer defendant for losses arising from an alleged Ponzi scheme run through purported investment entities Horizon Private Equity, III, LLC ("Horizon III") and Horizon Private Equity, LLC ("Horizon I"). The complaint alleges that the defendant aided and abetted the perpetration of a Ponzi scheme through Horizon III by representing himself as the manager of the entity to conceal the fact that his close friend, a dually registered broker-dealer and investment adviser who was not permitted to serve in that role, actually controlled and managed Horizon III. Additionally, the complaint alleges that the defendant also ran his own Ponzi scheme through Horizon I, wherein he used victims' investments to fund his lifestyle, support his accounting business, and fund a failed real estate project, amongst other improper uses. The SEC seeks recovery under theories of violations of or aiding and abetting violations of the Investment Advisers Act of 1940, the Securities Act of 1933, and the Securities Exchange Act of 1934.
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