California Pre-IPO Investment Ponzi Leads to SEC and U.S. Attorney’s Charges

Posted on June 8th, 2016 at 3:01 PM
California Pre-IPO Investment Ponzi Leads to SEC and U.S. Attorney’s Charges

From the Desk of Jim Eccleston at Eccleston Law LLC:

Two men in California have been charged by the SEC in connection with allegedly pocketing millions from investors. The investors allegedly were told they would receive 60% returns for investing in pre-IPO stocks.

The SEC named Jaswant Gill of San Diego and Javier Rios of National City along with their company JSG Capital Investment in the complaint. They are charged with operating a classic Ponzi scheme that uses new investor money to pay off older investors. The SEC has received an asset freeze for all three. The two individuals will also face criminal charges of wire fraud and conspiracy to commit wire fraud to be filed by the U.S. Attorney for the Northern District of California.

According to the SEC complaint the two pocketed at least $2.8 million of the approximately $10 million they raised instead of using the firm’s purported proprietary trading models to invest in pre-IPO shares of tech companies like Uber, Alibaba and Airbnb as promised. The U.S. Attorney’s office believes that the amount fraudulently stolen is closer to $5.5 million.

The complaint also alleges that the pair used a portion of that money to finance trips to high-end restaurants and luxury retail stores as well as lavish vacations in Las Vegas casinos, gentleman’s clubs and professional sporting events. Additionally they claim that they used the funds from new investors in order to pay off older investors.

The details, according to the complaint, say that Gill created phony credentials, claiming that he founded his firm after serving as a managing director at Morgan Stanley. In addition he boasted of partnerships with Silicon Valley venture capital firms. None of the involved parties was registered with the SEC or any state regulator and Rio’s background is in food service. 

The attorneys of Eccleston Law LLC represent investors and advisers nationwide in securities and employment matters. Our attorneys draw on a combined experience of nearly 65 years in delivering the highest quality legal services. If you are in need of legal services, contact us to schedule a one-on-one consultation today.

Related Attorneys: James J. Eccleston

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California Pre-IPO Investment Ponzi Leads to SEC and U.S. Attorney’s Charges
California Pre-IPO Investment Ponzi Leads to SEC and U.S. Attorney’s Charges
 

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