Ex-student of University of Georgia pleads guilty to securities fraud

Maria Nikolova

Syed Arbab’s plea of guilty subjects him to a statutory penalty of up to 5 years of imprisonment, a maximum fine of $10,000 and supervised release of no more than 3 years.

Syed Arham Arbab, a former student of University of Georgia, has pleaded guilty to one count of securities fraud in a criminal action launched against him by the United States Department of Justice.

According to a set of documents filed with the Georgia Middle District Court late last week, Arbab’s plea of guilty subjects him to a statutory penalty of up to 5 years of imprisonment, a maximum fine of $10,000 and supervised release of no more than 3 years.

The information filed against the defendant states that, from about May 2018 to at least May 2019, he offered and sold investment contracts as part of a scheme to defraud investors.

In particular, Arbab purported to manage investment entities, which he at times referred to as a “hedge fund”. Among these entities were Artis Proficio Capital Management and Artis Proficio Capital Investments. Through a variety of means, Arbab became connected to investors in Georgia and other states, who agree to invest with him and APC. In order to solicit funds, Arbab repeatedly made materially false statements and representations to prospective investors. For instance, he made false promises about return rates as high as 22.7% or even 56%.

Arbab used some investor funds for a host of purposes unrelated to investors’ financial interests, including to pay for his own travel and entertainment. When Arbab’s investors sought to withdraw their funds, Arbab used other investors’ funds to pay them back.

As a result of the scheme, investors lost between $550,000 and $1,500,000.

Arbab’s sentencing is currently set for January 8, 2020.

Let’s note that Arbab is a defendant in a civil lawsuit brought by the Securities and Exchange Commission. That case continues too.

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