Investment Professional Charged With Double Dealing Stock and Pocketing the Money

December 2nd, 2014
in econ_news

from Securities and Exchange Commission

The Securities and Exchange Commission today charged the owner of several now-defunct investment entities with fraudulently selling shares of stock that he claimed to own when he had actually purchased them for others a few years before.

Follow up:

The SEC alleges that Vinay Kumar Nevatia, who used several aliases while living in Palo Alto, Calif., sold approximately $900,000 worth of stock he supposedly owned in a privately-held information technology company called CSS Corp. Technologies (Mauritius) Limited. He deceived the buyers into believing that he owned the shares, orchestrated a series of secret wire transfers, and induced the stock transfer agent into recording his fraudulent sales. He stole the money he received from investors for his own use.

According to the SEC’s complaint filed in federal district court in San Francisco, Kumar provided the true owners of the shares with fake updates on their investments for more than a year after he had disposed of their stock in these subsequent sales in 2011 and 2012. The actual owners had bought the CSS stock through Kumar in 2008. Kumar has never been registered with the SEC nor licensed to trade securities. Said Jina L. Choi, Director of the SEC’s San Francisco Regional Office:

Kumar portrayed himself as a legitimate investment professional when he was actually double dealing stock shares and pocketing the money for himself.

The SEC’s complaint charges Kumar with violating the antifraud provisions of the Securities Act of 1933 and Securities Exchange Act of 1934, and seeks permanent injunctions, the return of ill-gotten gains, and a financial penalty.

The SEC’s investigation was conducted by William T. Salzmann, Jason H. Lee, and Cary S. Robnett of the San Francisco Regional Office with assistance from Kristin A. Snyder, Stephanie A. Wilson, Edward G. Haddad, Brian Applegate, Michael A. Tomars, and Tracey A. Bonner of the San Francisco office’s examination program. Mr. Salzmann and Mr. Lee will lead the SEC’s litigation. The SEC appreciates the assistance of the U.S. Attorney’s Office for the Northern District of California, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.

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