Two India-Based Operators Charged By SEC In Alleged “Guaranteed” Scheme

By Mani
Updated on

The Securities and Exchange Commission (SEC) announced charges on Tuesday against two India-based operators of offering investment plans providing daily yields ranging between 1.5% and 2%.

The operators allegedly used the “Profits Paradise” website and various social media platforms to detail three investment plans with terms of 120 business days.

SEC cracks down on Profits Paradise scheme

In a press release, the SEC’s Enforcement Division alleged that Pankaj Srivastava and Nataraj Kavuri offered “guaranteed” daily profit as they anonymously solicited investments for their purported investment management company called Profits Paradise.

The SEC alleges that they created a Profits Paradise website and related social media sites describing the profits as “huge,” “lucrative,” and “handsome”, while characterizing the risk as “minimal”. They also attempted to conceal their identities by supplying a fictitious name and contact information when registering their website address. They also allegedly communicated under the fake names of “Paul Allen” and “Nathan Jones”.

According to the SEC, the duo invited investors to deposit funds that supposedly would be pooled with money from other investors and traded on foreign exchanges, stocks and commodities. Using website and YouTube videos to highlight their investment plans, they offered three plans with terms of 120 business days. While the first plan purportedly yielded daily interest of 1.5% on investments of $10 to $749, the second plan purportedly yielded 1.75% on investments of $750 to $3,499. On investment of $3,500 and above, the third plan supposedly yielded 2%.

Social media strategy

The two Indian nationals also allegedly posted on Profit Paradise’s Facebook page promising investors they could “Enjoy Hassle Free Income” and advertised a “5% Referral Commission”. The scheme also utilized a Profits Paradise Twitter account to steer potential investors to the Profits Paradise website, and the duo also created a Google Plus page to promote the investment opportunity. The duo worked hard to remain secret in their effort to swindle investors through social outreach and a website that attracted nearly 4,000 visitors per day.

The SEC’s Enforcement Division alleges that the duo violated Section 17(a)(1) and (3) of the Securities Act of 1933 and the U.S. watchdog for financial trading will litigate the matter before an administrative law judge.

Under Indian rulings, investments in global FX markets are prohibited. The country’s central bank, Reserve Bank of India, prohibits investors to deposit funds with brokers through credit and debit cards. Through collective efforts from regulators in the U.S., India, Canada and Hong Kong, the SEC issued the notice highlighting the un-authorized and fraudulent high-yield investment scheme.

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