An individual posing as an investment professional in Silicon Valley has been charged with fraud related to a scheme where he allegedly pocketed $900,000 worth of stock owned by eight other people.
The Securities and Exchange Commission filed a complaint Tuesday accusing Vinay Kumar Nevatie, a Palo Alto, Calif.-based investor and former consultant, of convincing eight investors to purchase shares of CSS Corp. Technologies (Mauritius) Limited, a privately held tech company, in 2008.
Three years later, Kumar allegedly began selling the stock by claiming to be the sole owner. The SEC said that Kumar actually owned less than 3 percent of the shares.
According to the complaint, Kumar went to great lengths to cover his tracks, using secret wire transfers, giving fake updates and documents to the real investors, and even convincing CSS’s stock transfer agent to create records of the allegedly fraudulent sales.
“Kumar portrayed himself as a legitimate investment professional when he was actually double dealing stock shares and pocketing the money for himself,” Jina L. Choi, director of the SEC’s San Francisco regional office, said in a statement.
Kumar has never been registered with the SEC or licensed to trade securities.
The SEC is seeking the return of the gains as well as a fine. The entire complaint can be found here.