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Notable litigation filed during March 2023 includes: (1) SEC v. Woodard; (2) SEC v. Kaplan; (3) James Bay Resources Limited, et al. v. Lockett & Horwitz, et al.; (4) Miklos v. McNamara, et al.; and (5) Scura, et al. v. Heppner, et al.

SEC v. Woodard, Civ. No. 1:23-cv-00112 (D.

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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…

Notable litigation filed during January 2023 includes: (1) SEC v. Engel; (2) Firestone, et al. v. Residential Properties Resources Fund II, LLC, et al.; (3) Ellusionist Cash Balance Plan and Trust, et al. v. Spiegel Accountancy Corp., et al.; and (4) SEC v. Ellison-Meade.

SEC v. Engel, Civ. No. 2:23-cv-00213-PA-JPR

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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.

SEC v. JMJ Capital Group and Richard Lee Ramirez is a Securities Exchange Commission (“SEC”) enforcement action filed in the United States District Court for the Southern District of California on September 30, 2022.  JMJ Capital Group (“JMJ”) is a California corporation and Richard Lee Ramirez (“Ramirez”) is the owner and sole operator of JMJ…

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.

Securities and Exchange Commission v. Alexandra Robert et al. was filed in the United States District Court for the Southern District of Florida on July 26, 2022, claiming violations of several provisions of the Securities Act and Securities Exchange Act. 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 this action against Defendants Alexandra Robert (“Robert”), the owner, founder, and CEO of Defendants Chalala Academy LLC (“Chalala”), a Florida limited liability company, and Lendvesting Academy Corp. (“Lendvesting”), a Florida-registered corporation formerly operating as a d/b/a of Chalala.

The complaint alleges from at least May 2020 through August 2021, Defendants fraudulently raised approximately $900,000 from roughly 80 investors, mostly Haitian and Haitian-Americans living in South Florida, by offering unregistered “investment programs” falsely promising guaranteed returns of up to 48%. Defendants falsely told investors that they would make interest generating loans to small businesses that would otherwise not qualify for traditional financing, thereby providing investors with high fixed returns.…

Continue Reading New Complaint – SEC v. Alexandra Robert, et al.

McGuireWoods’ Ponzi Litigation team launched its Ponzi Perspectives blog in early 2021.  Since that time, our focus is to track key cases and decisions that have the potential to influence controlling law on Ponzi-related issues.  The blog also offers analysis on practical considerations when defending Ponzi litigation.  This 2022 mid-year round up summarizes the new…

Securities and Exchange Commission v. Boron Capital, LLC et al. was filed in the Northern District Court of Texas, Lubbock Division on June 14, 2022, claiming violations of 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, disgorgement of any ill-gotten gains, and civil penalties.

The SEC brought this action against Boron Capital, LLC (“Boron”), BC Holdings 2017, LLC (“BC Holdings”), United BNB Fund 2018, LLC (“United”), and Blake Robert Templeton (“Templeton”) (collectively, “Defendants”).

Templeton founded Boron, a Nevada limited liability company, in order to operate a real estate business, and Templeton serves as its CEO and managing member. Templeton also controls Defendants United and BC Holdings. United is a Texas limited liability company formed by Templeton that operates as an investment fund managed by Boron. BC Holdings is a Wyoming limited liability company wholly owned by Templeton through which he offered and sold promissory notes in connection with his real estate business.  Templeton offered and sold securities to investors in three forms: (1) promissory notes issued by Defendant Boron; (2) investment units in Defendant United; and (3) promissory notes issued by Defendant BC Holdings.…

Continue Reading New Complaint – SEC v. Boron Capital, LLC, et. al.