The Commission filed five new enforcement actions last week. They focused largely of Ponzi schemes and similar types of frauds. No additional cases were voluntarily dismissed.
Be careful, be safe.
SEC Enforcement – Filed and Settled Actions
Statistics: Last week the Commission filed 5 new civil enforcement actions.
Pyramid scheme: SEC v. Mufareh, Civil Action 6:23-cv-01539 (M.D. Fla. Filed August 11, 2025). This is an action which names as Defendants: Ashraf Mufareh and OnePassive LLC a/k/a Gofounders and Ofounderes. Defendants are alleged to have fraudulently raised over $108 million over a five-year period beginning in 2018. Investors were told that the firm was developing a suite of online computer applications that used artificial intelligence. In fact, the claimed business was a multilevel fraud scheme. The complaint alleges violation of Securities Act Sections 5(a), 5(c) and 17(a), and Exchange Act Section 10(b) and Rule 10b-5. To resolve the matter Defendants consented to the entry of permanent injunctions based on the provisions cited. Mr. Mufareh also agreed to the entry of an officer-director bar for a period of eight years. In addition he agreed to pay a penalty of $4 million while OnPassive will pay disgorgement of $26,220,364, prejudgment interest of $1,218,528.40 and penalty of $4 million.
Ponzi schemes: SEC v. Wear, Civil Action No. 25-civ-6713 (S.D.N.Y. Filed August 14, 2025) and SEC v. Chirico, Civil Action No. 25-civ-6715 (S.D.N.Y. Filed August 14, 2025). In the two complaints the Commission charged Ryan Wear of Marysville, Washington, and his entities (Watere Station Management LLC and Creative Technologies, Inc. ) for operating two related Ponzi schemes beginning in 2016 and continuing until early 2024. Over $275 million was raised from about 250 investors. The first case names as defendants Mr. Wear, Water Station and Creative Technologies. The complaint in the first action focused largely on retail investors. It claimed that Defendants Wear, Water Station and Creative Technologies raised about $165 million in which investors purchased largely water machines that supposedly would generate revenue. In fact, for the most part the water machines were not available. In the second action defendant Jordan Chirico is alleged to have raised about $110 million from institutional investors between April 2022 and February 2024. There investors purchased Water Station notes that supposedly were secured by water station machines. Most of the machines involved either did not exist or were not owned by Water Station. Defendants are also alleged to have misappropriated about $60 million of investor funds to make Ponzi type payments. In the first case Mr. Chirico is alleged to have violated Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5 and Section 20(a). In the second action Mr. Chirico is alleged to have violated Advisers Act Sections 206(1) and (2). The U.S. Attorney’s Office for the Southern District of New York filed parallel criminal charges against Messrs. Wear and Chirico. See Lit. Rel. No. 26375 August 15, 2025).
False audit reports: SEC v. Olayhinka Temitope Oyebola, Civil Action No. 24-cv-7376 (S.D.N.Y.). Named as Defendants in the action are: Olayinka Temitope Oyebola and accounting firm Olayinka Oyebola & Company. The firm was registered with the PCAOB. The complaint alleges as to Oyebola and his firm that they deliberately failed to take action after learning that a businessman known as Dozy Mmobousi and three related U.S. entities that Mmobuosi controlled created multiple fake audit reports bearing Oyebola’s signature. Those reports were included in SEC filings. Oyebola and his firm also helped Mmobuosi conceal the fact that the audit reports were fake, resulting in the auditor, investors, and regulators relying on the misstatements and false report to their detriment. They thus aided in the implementation of a multiyear fraudulent scheme. The SEC’s complaint alleged violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. Defendants settled the matter, consenting to the entry of permanent injunctions based on the provisions cited. In addition, Defendant Oyebola was enjoined from future violations of Exchange Act Rules 13b-2-2(a) and (b). In addition, Mr. Oyebola and his firm were directed to pay civil monetary penalties of $100,000. Subsequently, the Commission issued orders under Rule 102(e) as to Defendants based on the entry of the judgments. Respondents agreed to be suspended from appearing and practicing before the Commission as accountants. They have the right to apply for reinstatement after six years. See Lit. Rel. No. 26373 (Aug. 13, 2025).
Offering fraud: SEC v. Moretz, Civil Action No. 5:24-cv-00171 (W.D.N.C. Filed July 29, 2024). The cases centers on the sale of a product called L Bonds. Those bonds are tied to life insurance and often used to finance the purchase of a policy. In this case, the Commission’s complaint alleged that investors were being deceived by Defendant Garrett W. Moretz, a registered investment adviser who was selling the L Bonds t the investment had risk. For example, he told one potential investor that the bonds were 100% safe. He told another investor that there was “zero risk” in investing in L Bonds. In fact, neither statement was true. The complaint alleged violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. To resolve the matter, Defendant consented to the entry of permanent injunctions based on the provisions cited in the complaint. Defendant Moretz will also be precluded from associating with a broker, or investment adviser for one year. The court also imposed monetary penalties. Those included $4,374.91 as disgorgement and $1,404.68 in prejudgment interest. Defendant also agreed to pay a penalty of $35,000. See Lit. Rel. No. 26372 (August 12, 2025).
Other Regulatory Actions (Articles/papers cited available on website of listed entity)
Australia
Remarks: Simone Constant, Commissioner, Australian Securities & Futures Commission, delivered remarks on August 13, 2025, title “The Great Retirement Race.” Her comments focus on recent research that “suggests only one-third of Australians on the cusp of retirement are confident that they will be financially comfortable once they leave the workforce.” At the same time, “retirement and member services are two sides of the same coin,” according to the Commissioner (August 13, 2025).
BaFin (Federal Financial Supervisory Authority)
Requirements: Documentation Requirements Under DORA made easy (or easier), detailed in a release dated August 8, 2025.
Hong Kong
Custody standards: The Securities and Futures Commission (“SFC”) elaborates on robust custody standards for virtual asset trading platforms to safeguard client virtual assets, published August 15, 2025.
Singapore
Payments: The Monetary Authority of Singapore and ABS Announced the Incorporation of New Payments Entity -Singapore Payments Network (SPaN) to Position National Payments Schemes for Next Stage of growth (June 25, 2025).
