Investor’s Funds Expended for Personal Items, Not on Company

Convincing investors to purchase a product based on misrepresentations is a traditional focus for the Commission’s enforcement division. In some of its cases the misrepresentations, while material, are straight forward. In others they are more complex. And, in some they may not be credible to many potential investors. No matter. If the representations are false, material and believed by the person being solicited to purchase the securities, there may be a violation of the federal securities laws. That is the situation presented in one of the Commission’s most recent cases, SEC v. Jordan-Jones, Civil Action No. 1:25-cv-04297 (S.D.N.Y. Filed May 21, 2025).

Named as defendants in the action are Jermy Jordan-Jones and Amalgam Capital Ventures, LLC. Mr. Jordan-Jones is the CEO of Amalgam Capital Ventures. The company is supposedly based in New York.

Beginning in late November 2021, and continuing until early the next year, Defendant Jordan-Jones solicited an investor to invest in Amalgam Capital. The investor – Investor A – was told that the firm had launched a blockchain-based point-of-sale and payment processing platform called Zeo. The investor was also told that the firm was operational and had $3 million in assets.

In fact, the firm did not have $3 million in assets; it was not operational.

The investor agreed to put $500,000 into the venture. Yet when the investor gave Defendant Jordan-Jones the funds, the money was not put into the venture. To the contrary, Defendant Jordan-Jones used the funds obtained from the investor for personal items – the money did not go the company. Rather, Defendant Jordan-Jones spend the investor’s capital on items for himself. The complaint alleges violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Rule 10b-5. The U.S. Attorney’s Office for the Southern District of New York filed parallel criminal charges. See Lit. Rel. No. 26309 (May 22, 2025).

Another Offering Fraud Action

Offering frauds are a longtime staple of the Commission’s enforcement division. These cases typically involve the originator of the scheme and his or her wholly owned entity that issues the securities. In many instances others are brought in to help implement the scheme.

High pressure tactics, firmly grounded on a bed of lies and false statements, are the juice that launches and feeds the scheme until it collapses. Frequently, the scheme targets a particular group. At times the case is paralleled by a criminal action initiated by the U.S. Attorney’s Office. The most recent case filed by the Commission in this area is SEC v. Safeguard Metals LLC, Civil Action No. 2:22-cv-00693 (C.D. Cal.).

Named as defendants in the action are: Jeffrey Ikahn and his firm, Safeguard Metals LLC. Mr. Ikahn owns and controls Safeguard Metals. Over a four-year period, beginning in 2017, Defendants targeted those about retirement age as potential investors for their scheme. The targeting was done through advertising and the website of Safeguard.

Potential investors were told that Safeguard had $11 billion in assets under management. The firm also had a London office, according to the pitch. Prominent individuals in the securities business were supposedly affiliated with the operations.

The sales pitch, centered on the sale of coins, was firmly tied to a bed of false statements. For example, sales agents for Safeguard told potential investors that a “Money Market Reform Law” permitted banks and brokerage firms to freeze retirement accounts if there was a market downturn, a false statement. It was also critical to another false statement — top financial experts were forecasting a downturn soon.

Safeguard and Mr. Ikahn also misled investors about the markups on the coins being sold. A “Precious Metals Shipping and Account Agreement,” created by Mr. Ikahn and available on the Safeguard website, told potential investors that the firm’s “operating margin” or mark-up was typically 4% to 23%, depending on the type of coin involved in the transactions. In reality, the markup was about 64%, yielding about $25.5. million in profits for Defendants.

Defendants obtained about $65 million from the sale of coins to over 450 largely elderly retail investors. The payments reflected the prices obtained from retail investors for the coins. The amended complaint alleges violations of Exchange Act Section 10(b) and Rule 10b-5 and Advisers Act Sections 206(1) and 206(2).

On June 14, 2023, the court entered partial judgments in favor of the Commission, permanently enjoining Safeguard and Defendant Ikahn from future violations of the Sections cited in the complaint. The final judgments, ordered as to Defendants on a joint-and-several basis, directed Safeguard and Ikahn to pay disgorgement of $25,569,303 as penalties along with prejudgment interest of $4,821,263. See Lit. Rel. No. 26307 (May 9, 2025).