Niket Shah of New Jersey, an Indian-origin man has been charged with stealing more than USD 250,000, charged by the Securities and Exchange Commission in a Ponzi scheme in which his friends and co-workers invested.
The federal regulator also ordered a preliminary injunction and asset freeze against Shah. According to the SEC’s complaint, unsealed on March 22 in federal court in Brooklyn, Shah used Spark Trading Group to defraud more than 15 investors into contributing hundreds of thousands of dollars to two funds that he marketed.
Shah received investments for the funds by lying about his success as a trader, Spark Trading’s returns, and how he intended to use investors’ money, including changing financial statements to make the funds appear profitable when they were actually losing money.
According to the complaint, Shah agreed to investors he would pay back them monthly returns and guaranteed against losses but he misused investor money for his own benefit and suffered substantial losses on the amounts actually invested.
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“Fraudsters who swindle their friends and colleagues using doctored financial statements and outright lies should expect the Commission and its staff to act swiftly and decisively, as we have here today,” Associate Director of the SEC’s Enforcement Division Melissa Hodgman said.
The SEC’s Complaint charges Spark Trading and Shah with violations of the antifraud provisions of the federal securities laws. The SEC is seeking the return of allegedly ill-gotten gains with interest and civil money penalties.
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