A Week of Settlements
This has been the week of settlements for the Commission. Since the 4th of July holiday, the agency has not filed a new enforcement action as either a civil injunctive action or an administrative proceeding. The agency has filed two settled actions this week of previously filed actions and secured a default in another case. Below are the two settled actions
Offering fraud: SEC v. Iakovou, Civil Action No. 4:22-cv-00194 (MD Ga.) is a previously filed action which named as defendants George Iakovou, Vika Ventures, LLC and Penelope Zbravos. Defendants George Iakovou and Penelope Zbravos are from New York. They control Vika Ventures. The complaint claimed that over a three-year period, beginning in 2019, the two individual defendants, who are dating, and their company conducted an offering fraud centered on the sale of what were supposed to be pre-IPO shares. Investors were solicited using claims that the shares in the offering were of firms that were about to go public. Elaborate documents were created for review by potential buyer about the opportunity. In fact, there was no opportunity because Defendants never had any shares, just a fictitious story spun by two individual defendants who supposedly had over $80 million in assets under management. Investors entrusted Defendants with over $6 million dollars. The only actual investments made, unfortunately, were in the lifestyles of Mr. Iakovou and Ms. Zbravos. The complaint alleged violations of Securities Act Section 17(a) and Exchange Act Section 10(b). Previously, the court entered a final judgment against Mr. Iakovou. He also resolved parallel criminal charges in January 2024. In that case he pleaded guilty to one count of conspiracy to commit wire fraud and was sentenced to 97 months in prison followed by three years of supervised release. Defendant Iakovou was also ordered to pay restitution of more than $5,958,505 and entered into a pretrial diversion agreement. The firm was ordered to pay a penalty of $8,929,120. Finally, although the Commission alleged that initially Ms. Zbravos did not know about the fraud, there were sufficient red flags over time that she must have learned about it. She consented to the entry of a permanent injunction based on the Securities Act Section 17(a)(3). The final judgement imposes disgorgement and prejudgment interest of $1,843,472.09. See Lit. Rel. No. 26048 (July 9, 2024).
Misrepresentations: SEC v. Amah, Civil Action No. 7:21-cv-06694 (S.D.N.Y) is an action which named as defendant, Evarist C. Amah, an investment adviser. The complaint alleged that Defendant ran a years-long scheme centered on providing clients with false information about his performance as an investment adviser. In September 2023, the court granted the Commission’s motion for summary judgment, concluding that Defendant was liable for fraudulently soliciting investments using positive projections while failing to disclose the losses. A final judgement was entered this week. It enjoins future violations of Securities Act Section 17(a), Exchange Act Section 10(b) and Advisers Act Sections 206(1), 206(2) and 206(4)-8. The court also orderd the payment of disgorgement in the amount of $10,000, prejudgment interest of $1,617.82 and a civil penalty of $669,6667. See Lit. Rel. No. 26047 (July 8, 2024).