The Securities and Exchange Commission charged an investment advisor with orchestrating an investment scheme over several years.
The SEC’s complaint alleges that Amrit J. S. Chahal used his company, Kane Capital Investment Group, to fraudulently solicit approximately $1.4 million from about 50 individuals, including friends and family members, from at least February 2015.
According to the complaint, Chahal lured investors by falsely claiming to be an experienced and successful trader who could generate above-market returns for clients through a low-risk trading strategy. In reality, Chahal had substantially no experience working in the financial or securities industry or trading securities on behalf of clients.
The complaint further alleges Chahal initially invested client funds in a variety of investments, but suffered significant trading losses. According to the complaint, instead of disclosing the losses, Chahal lied to his clients about their investment returns, continued raising funds, then used the money for his personal benefit, including to pay for his luxury car, rent, travel, dining, and other living expenses, and to make Ponzi-like payments to earlier investors.
The SEC seeks a permanent injunction, disgorgement, and penalties. The U.S. Attorney’s Office for the Eastern District of Virginia also announced criminal charges against Chahal. The Commodities Futures Trading Commission also charged Chahal.
SEC Charges Businessman With Stealing Millions From a Pension Plan
The Securities and Exchange Commission charged a Memphis, Tennessee-area businessman with stealing approximately $5.7 million from a Pennsylvania company’s pension plan.
On three separate occasions between March 2015 and February 2016, John Jumper stole millions of dollars from Snow Shoe Refractories LLC’s pension plan, according to the SEC’s complaint.
Jumper allegedly forged documents, including fake Board of Directors resolutions, to steal the funds. Jumper allegedly used the stolen funds to capitalize other businesses he owned, to repay personal debts and, in one instance, to invest in another business that paid a significant fee to a broker-dealer that Jumper co-owned.
The U.S. Attorney’s Office for the Middle District of Pennsylvania announced parallel criminal charges against Jumper.
The SEC seeks disgorgement of ill-gotten gains plus interest, penalties and injunctive relief. The complaint also names Alluvion Securities LLC, American Investments Fund II LLC, Speedee Brakes LLC, Thousand Hills Capital LLC and Evertone Records LLC as relief defendants for the purpose of recovering stolen pension funds allegedly in their possession.
FINRA Fines LPL Over Brokered CDs
LPL Financial was censured and fined $375,000 by FINRA for failing to implement a supervisory system reasonably designed to ensure that its registered representatives were trained on all material risks and features of brokered certificates of deposit (CDs). According to FINRA, the firm also did not adequately disclosed all material risks and features of the brokered CDs to customers.