Former Merrill Lynch Broker Settles SEC Case Over $3 Million Investment Fraud
From the desk of Jim Eccleston at Eccleston Law
A former Dallas-based broker has settled civil charges with the Securities and Exchange Commission (SEC) after stealing nearly $3 million from his clients over nine years.
As reported by AdvisorHub, Rajesh Markan pleaded guilty to related criminal charges in the same court and now faces up to five years in prison. In October, FINRA permanently barred him from associating with any member firm.
According to court documents, Markan’s scheme began in late 2014 while he was registered with Merrill Lynch. He solicited client investments in a fictitious private equity fund, the “Intrinsic Value Portfolio,” falsely claiming it was managed by a well-known New York private equity firm. Markan promised investors market-beating returns and, at one point, provided a fake spreadsheet to back his claims. By 2022, he escalated the deception by offering a formal prospectus for the sham fund.
The SEC detailed how Markan wired client funds directly into his bank account, using the money for personal expenses, including luxury vehicles, dining, shopping, medical treatments, and elective procedures. In one case, he fabricated statements for a couple, making it appear their $300,000 investment had grown over 500 percent to $1.9 million in seven years.
AdvisorHub reports that the fraud began unraveling in 2022 when an investor discovered no such fund existed. Markan returned her investment, along with $140,000, presumably to deter her from alerting authorities. By 2023, with funds depleted, Markan pressed another couple to sell their home and invest the proceeds. Their suspicion triggered broader inquiries among other investors. Markan resigned from Hilltop Securities, where he had moved in October 2022 after leaving Merrill amid an internal probe.
Markan currently faces eight pending customer complaints, filed between August 2024 and February, with claims totaling over $4.3 million in alleged damages, according to AdvisorHub.
Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.
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