McGuireWoods’ Ponzi Litigation team launched its Ponzi Perspectives blog in early 2021. Since that time, we’ve posted detailed case alerts of Ponzi-related complaints filed throughout the country and posted key decisions that have the potential to influence controlling law on Ponzi-related issues involving financial institutions. This 2023 year-end round up summarizes the cases and opinions analyzed throughout the year and highlights anticipated trends for 2024.

Continue Reading… Ponzi Perspectives: 2023 Year-End Roundup

McGuireWoods’ Ponzi Litigation team launched its Ponzi Perspectives blog in early 2021. Since that time, we’ve posted detailed case alerts of Ponzi-related complaints filed throughout the country and posted key decisions that have the potential to influence controlling law on Ponzi-related issues involving financial institutions. This 2022 year-end round up summarizes the cases and opinions analyzed

Continue Reading… Ponzi Perspectives: 2022 Year-End Roundup

Securities and Exchange Commission v. Lam, et al. was filed in the United States District Court for the Central District of California on September 22, 2022, claiming Defendants Brian Lam (“Lam”), Nathan Nguyen (“Nguyen”), NineSquare Capital Partners LLC (“NineSquare Capital”), and Nguyen Group LLC (“NGL”) (collectively, “Defendants”) violated several provisions of the Securities Act and Securities Exchange Act. Specifically, the SEC seeks permanent injunctive relief against all Defendants to prevent future violations of the federal securities laws, permanent injunctions prohibiting Defendants Lam and Nguyen from participating in an unregistered securities offering, disgorgement with prejudgment interest from Defendants and Relief Defendants Yi Ping Lu and Thy Stacy Nguyen (the “Relief Defendants”), and civil penalties against Defendants.

The SEC filed this action against Defendants for operating an offering fraud that targeted the Vietnamese-American community, which raised $11.7 million from 73 investors nationwide from March 2020 to January 2022. Defendant Lam orchestrated the fraud through his company NineSquare, a Delaware limited partnership which purported to be a hedge fund. Defendant Nguyen is the principal of NGL, a company that helped solicit investors in NineSquare. The two Relief Defendants, Yi Ping Lu, Lam’s wife, and Thy Stacy Nguyen, Nguyen’s wife, purportedly used proceeds from the fraud to pay for luxury homes purchased in their names.

Continue Reading… New Complaint – Securities and Exchange Commission v. Lam, et al.

U.S. Commodity Futures Trading Commission v. Giri, et al., was filed in the United States District Court for the Southern District of Ohio on August 11, 2022, claiming violations of several provisions of the Commodity Exchange Act and Commission Regulations. Specifically, the U.S. Commodity Futures Trading Commission (“CFTC”) seeks permanent injunctive relief against all Defendants, disgorgement, rescission, and civil penalties.

The CFTC brought this action against Rathnakishore Giri (“Giri”), SR Private Equity, LLC (“SR Private Equity”), NBD Eidetic Capital, LLC (“NBD Eidetic”), Giri Subramani (“Subramani”), and Loka Pavani Giri (“Pavani Giri”) (collectively, “Defendants”) who are alleged to have engaged in a fraudulent scheme to trade digital assets—mainly bitcoin—on behalf of investors. Defendant Giri is a controlling person of both Defendants NBD Eidetic, an Ohio limited liability company, and SR Private Equity, an Ohio limited liability company. Defendants Subramani and Pavani Giri are the parents of Defendant Giri.

The complaint alleges that starting in or around March 2019, Defendant Giri solicited
Continue Reading… New Complaint – U.S. Commodity Futures Trading Commission v. Giri, et al.

Securities and Exchange Commission v. Okhotnikov was filed in the United States District Court for the Northern District of Illinois on August 1, 2022, claiming violations of several provisions of the Securities Act and Securities Exchange Act in connection with offering and selling unregistered smart contracts operated on the Ethereum, Tron, and Binance blockchains. Specifically, the SEC seeks permanent injunctive relief against all Defendants in order to prevent future violations of the federal securities laws, disgorgement of any ill-gotten gains, and civil damages.

The SEC brought the enforcement action against Defendants Vladimir Okhotnikov (“Okhotnikov”), Jane Doe a/k/a Lola Ferrari (“Ferrari”), Mikail Sergeev (“Sergeev”), and Sergey Maslakov (“Maslakov”)—a set of Russia-based individuals who are alleged to have created, operated, and maintained an online pyramid and Ponzi scheme through smart contracts on various blockchains (collectively, the “Founder Defendants”)—and Defendants Samuel D. Ellis (“Ellis”), Mark F. Hamlin (“Hamlin”), and Sarah L. Theissen (“Theissen”) who are individuals alleged to have engaged in the promotion or sale of the smart contracts to investors within the United States (collectively, the “Promoter Defendants”).

The complaint alleges that in the fall of 2019, the Founder Defendants formed Forsage.io (“Forsage”), an unincorporated entity, for the purpose of coding smart contracts on various blockchains and building a website that would serve as an interface for the promotion and sale of the smart contracts. However, the complaint alleges that from January 2020 until the present, Defendants operated, promoted, and maintained an online pyramid and Ponzi scheme through Forsage, allowing millions of retail investors to enter into transactions via the sale of unregistered smart contracts maintained on the Ethereum, Tron, and Binance blockchains. To date, the transactions have totaled over $300 million.

Continue Reading… New Complaint – SEC v. Vladimir Okhotnikov, et al.