SEC Moves to Stop Financial Fraud That Bilked Over 100 Investors Of Over $14 Million

The Securities and Exchange Commission has filed fraud charges and obtained an asset freeze against three individuals accused of stealing investor money. According to the regulator, David Kayatta, Paul Ricky Mata, and Mario Pincheira raised over $14M from over 100 investors for two unregistered funds. The money was supposed to be placed in real estate.

The SEC’s complaint noted that on a website run by Mata, the alleged fraudsters advertised an “Indestructible Wealth Bootcamp” and promised said wealth when, in truth, both funds never made a profit. Online videos on the website and YouTube marketed this investment seminar and another one titled “Finances God’s Way.” Retirees were encouraged to sell their securities holdings and get involved in the unregistered funds.

The complaint states that Mata is an ex-licensed securities professional with a lengthy disciplinary record that he hid from investors. He and Kaytata allegedly promised guaranteed returns for one fund even though a state regulator had sanctioned them for making such promises. The two men are accused of diluting the investments in the other fund by bringing in new investors while making false assurances to current investors that the two funds were doing well. Pincheira, Kayata, and Matta purportedly charged dinners, entertainment, travel, and other expenses on Pincheira’s credit card and paid off the balances with investor money. Monthly balances on the card were often above $40,000.

Unfortunately, new technologies are making it easier for fraudsters to reach more investors. Well-edited videos and legitimate looking ads can make scammers appear as if they are experienced and qualified to offer financial advice when they are not. At Shepherd Smith Edwards and Kantas, LTD LLP, our securities fraud lawyers are here to help investors who have sustained losses because of financial scams.

In other news involving fraud schemes perpetuated using the Internet and other modern technologies. The Financial Industry Regulatory Authority recently put out an investor alert warning about messaging Aps that help deliver pump-and-dump scams. The self-regulatory organization wants investors to watch out for stock promotions submitted via WhatsApp and other aps.

FINRA said that users of WhatsApp have been inundated with text messages promoting the Avra Inc. stock. The messages about this microcap stock are supposedly from individuals at known broker-dealers and have been accompanied by claims that the stock was about to double.

The SRO said using apps to promote pump-and-dump scams is spamming. Investors who buy the stock end up inflating the price and the fraudsters go on to dump the shares at that higher price. Meantime, investors who made the purchase end up losing money or with stock that has hardly any or no value at all.

Our financial fraud lawyers have helped thousands of investors. Shepherd Smith Edwards and Kantas, LTD LLP would be happy to offer you a free case consultation so that you can explore your legal options.

Read the SEC Complaint (PDF)

Messaging Apps Are Latest Platform for Delivering Pump-And-Dump Scams, FINRA