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US SEC Charges Florida Dentist for Three Separate Securities Frauds

US SEC Charges Florida Dentist for Three Separate Securities Frauds

The US Securities and Exchange Commission (SEC) announced on Friday that it had charged Edgar M. Radjabli of Boca Raton, Florida, and two entities he controlled for engaging in three separate securities frauds – one of them related to a token offering.

According to the press release, Radjabli owned an unregistered investment adviser firm named Apis Capital Management LLC that allegedly conducted a fraudulent offering of a coin dubbed “Apis Tokens.” These cryptos represented tokenized interests Apis Capital’s main investment fund, the US SEC said. In fact, Radjabli – formerly a practicing dentist – published a press release, falsely claiming such a token offering raised $1.7 million.

Furthermore, the complaint alleges that the former dentist also allegedly manipulated the securities market for Veritone Inc., an existing and publicly traded artificial intelligence company, as he announced in 2018 an unsolicited cash tender offer to purchase the firm for $200 million.

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However, that was another false statement, as Radjabli and his adviser company didn’t have any money to make that purchase possible. “Radjabli allegedly generated $162,800 in illicit profits on the resulting increase in Veritone’s stock price by trading Veritone securities on behalf of Apis Capital and an affiliated fund,” the SEC added. The third fraud consisted of another fraudulent securities scheme, as Radjabli allegedly raised around $20 million from more than 450 investors via My Loan Doctor LLC.

Defendants Agreed to Settle

“Radjabli falsely represented that investor funds raised by Loan Doctor would be used to originate loans to healthcare professionals which then would be securitized and sold to large institutional investors.  Instead, Radjabli allegedly invested the bulk of the investor funds in unsecured and uninsured loans to digital asset lending firms and loaned almost $1.8 million of investor proceeds to Apis Capital,” the complaint reads.

The defendants in the case have agreed to settle the charges against Radjabli, Apis Capital, and Loan Doctor. If the court approves the settlement, it would require Radjabli to pay a total of $600,000 in monetary relief comprised of $162,800 in disgorgement, $17,870 in prejudgment interest, and $419,330 in civil penalties.


US Regulators Warn on Potential Risks in Bitcoin Futures Trading

US Regulators Warn on Potential Risks in Bitcoin Futures Trading

The US Securities and Exchange Commission’s (SEC) Office of Investor Education and Advocacy (OIEA) and the Commodity Futures Trading Commission’s (CFTC) Office of Customer Education and Outreach (OCEO) issued a warning on Thursday targeting investors who are looking for funds with exposure to Bitcoin futures. According to the investor bulletin, people should exercise caution and be careful about the investment’s potential risks and benefits.

“Among other things, investors should understand that Bitcoin, including gaining exposure through the Bitcoin futures market, is a highly speculative investment,” the regulatory bureaus commented. Furthermore, they raised concerns once again on the volatility that Bitcoin brings to the crypto sphere and that it’s being witnessed on the Bitcoin futures markets.

In fact, they cited the lack of regulation and “potential for fraud or manipulation” of the market. The bulletin provides guidance on which elements the investors should pay attention to, such as the risk tolerance, the fund’s disclosure of its risks, potential loss of the investment, and the difference in investment outcome.

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“A rise in Bitcoin prices may not result in a similar increase in the value of a fund holding positions in Bitcoin futures contracts. This is in part because funds that trade commodity futures contracts may not have direct exposure to the contracts’ underlying assets. Futures contract prices can vary by delivery months and differ from the underlying commodity’s spot price,” the regulators said.

Investment Company Act of 1940

Also, in the bulletin, the bureaus who signed the warning highlighted that funds regulated under the Investment Company Act of 1940 are required to provide critical investor protections, such as: “funds must comply with legal requirements related to valuation and custody of fund assets, and mutual funds and ETFs must comply with liquidity requirements.”

Recently, the US SEC opened the doors to establishing cooperation with the lawmakers from Congress and other regulatory bodies to work on ways to protect crypto investors.