SEC Accuses Investment Adviser of Misappropriating Funds from Hedge Funds
The US Securities and Exchange Commission (SEC) has secured an emergency asset freeze, as well as a temporary restraining order, to stop an ongoing allegedly fraudulent securities offering that was purportedly conducted to conceal the misappropriation of about $570K from hedge fund clients. The regulator contends that investment adviser Eric D. Lyons and his investment advisory businesses, Synchronicity Capital GP, LLC, Synchronicity Capital Group, and Synchronicity Group, LLC, used the money to pay for Lyons’ personal spending, including Broadway shows, concert tickets, sailing expenses, rent, and other costs.
According to the regulator’s complaint, the allegedly fraudulent securities offering involved securing about $300K from one investor who thought other large investors would be potentially involved and that there was a $100M business valuation. The SEC alleges that, in total, the Synchronicity entities and Lyons raised about $700K through both the misappropriation of funds and the allegedly fraudulent offering.
Now, the Commission wants disgorgement of ill-gotten gains along with interest, injunctive relief, and penalties in this hedge fund fraud case.
Former Brokerage Firm Sales Assistant Accused of Defrauding Customers, Including Seniors
In an investor fraud case involving a sales assistant at a registered broker-dealer, the SEC is charging Kimberly Sredich with misappropriating at least $339,725 from at least 15 client brokerage accounts. Quite a number of these customers were older senior investors. The firm fired Sredich, who was the assistant to one of the broker-dealer’s registered representatives, last year.
According to the SEC’s complaint, between 8/2014 and 6/208, Sredich compelled more than 40 check disbursements to be issued from the clients’ accounts and then deposited them to an ELGA Credit Union account belonging to her and her husband. The clients never gave their permission for these transactions to occur. Instead, Sredich allegedly forged their signatures or used blank authorization letters that they had already signed. She also allegedly liquidated securities in customer accounts before misappropriating the monies.
Investor Fraud Allegedly Targeted Israeli-Americans
The SEC has placed a stop to an alleged investor fraud focused on the Jewish American community. According to the regulator’s emergency action, Motty Mizrahi and his MBIG Company defrauded at least 15 investment advisory clients of over $3M.
The SEC’s complaint contends that Mizrahi falsely claimed the use of sophisticated trading tactics to earn 2-3% monthly guaranteed returns and that investing was risk-free, with clients able to access their funds whenever they wanted. Instead, Mizrahi allegedly used investors’ money to cover his own expenses and trade in his own brokerage account. Those trades involved risky options that led to over $2.2M in losses.
Meantime, the alleged fraud was concealed via fake account statements that showed trading profits and positive balances, as well as statement accounts making it appear as if a fake MBIG brokerage account was holding a balance that was in the millions of dollars.
Even if the SEC has filed fraud charges against the financial representative and/or brokerage firm or investment advisory firm that was responsible for your losses, it is still important that you hire your own investor fraud lawyer who can fight for your right to financial recovery. Contact Shepherd Smith Edwards and Kantas, LLP (SSEK Law Firm) today for your free, no obligation initial case consultation.