SEC & Fraud Cases: Ponzi Scam Targeting Middle Class Investors is Stopped, NY-Based Forex Trader is Accused of Bilking Ex-Classmates, Family, and Friends, and NC Investment Adviser is Sued Over $11.5M Real Estate-Related Scheme

SEC Stops Ponzi Scam Involving Pre-IPO Stocks and Middle Class Investors
The U.S. Securities and Exchange Commission is charging Jaswant Gill and Javier Rios with fraud. The regulator claims that the two men and their investment firm, JSG Capital Investments, targeted middle-class investors through a Ponzi scam in which they touted purportedly huge returns through pro-IPO stock in renowned companies such as Airbnb, Alibaba, and Uber.

Gill and Rios are accused of pocketing at least $2.8M in investor money for their own lavish spending instead of investing the money in the pre-IPO shares. Funds of new investors were used to pay “returns” to earlier investors.

Gill allegedly touted fake credentials. He, Rios, and their firm are not registered with the Commission or with a state regulator.

The SEC said that in total the two investment advisers raised $10M through their company and related entities. They are said to have promised these retail investors access to investment opportunities that were typically only available to “one-percenters.” They also guaranteed yearly returns as high as 60%.

The U.S. Attorney’s Office for the Northern District of California has filed a parallel criminal case against Rios and Gill.

Trader Accused of Bilking Friends and Family of Millions of Dollars
The SEC is suing Haena Park for allegedly defrauding friends, her ex-Harvard classmates, family members, and other individuals of millions of dollars. Park is accused of using investor funds and making misrepresentations about her investment history, as well about the profits the investments were supposed to have made.

Since 2012, Park has raised at least $14M from over 30 investors, sustaining $16M in trading losses in the process.

Park invested people’s money in the futures and forex markets, losing badly. However, said the Commission, that did not stop her from telling investors they were making money and she sent them doctored account statements to make these fake profits seem real.

Park also allegedly made Ponzi-like payments to earlier investors by using new investors’ money.

The U.S. Attorney’s Office for the Southern District of New York has brought a parallel criminal case against Park.

North Carolina-Based Financial Advisors Takes Money from Real Estate-Related Investments
Richard W. Davis Jr., a North Carolina-based investment adviser, is accused of bilking investors. Davis allegedly funneled money from real estate-related investments into deals with companies that he ran or owned.

The SEC contends that Davis defrauded at least 85 individuals who had collectively invested about $11.5M. He’d sold them interests in DCG Real Assets LLC and the DCG Commercial Fund I LLC, which are two unregistered pooled investment vehicles.

Davis told Commercial Fund investors that their funds would pay for short-term loans to real estate developers but purportedly did not tell them that half of the projects involved his companies. Investors would go on to lose money because the loans were never fully paid but Davis allegedly did not tell them about this outcome.

He is accused of not telling Real Assets investors that at least $7.7M of the $9.8M they gave him had been moved to his own entities. These funds were then spent or moved to other entities he ran or owned until all of the money was gone. Meantime, investors thought that their money was growing every year.

The Commission claims that Davis breached his fiduciary duty to investors, failed to disclose or fix conflicts of interest, issued misleading and false statements to investors, and did not tell them about their losses.

Read the Complaint in the Ponzi Scam involving JSG Capital Investments (PDF)

The SEC Complaint in the Park case (PDF)

The SEC Complaint in the Davis case (PDF)