SEC charges London-based Piptastic and its director Damon Elliott with fraud

Maria Nikolova

The defendants are accused of having fraudulently raised and then misappropriated more than $9 million from at least 80 investors.

The United States Securities and Exchange Commission (SEC) today filed a complaint against Damon Elliott, Piptastic Limited, as well as against relief defendants DSE Retail Limited, Paul Rose, Unique Asset Management Limited, and Sharon Elliott.

According to the complaint, submitted at the federal court in Massachusetts, alleges London-based Pipstatic and its director Damon Elliott fraudulently raised and then misappropriated more than $9 million from at least 80 investors, including at least $5.3 million from at least 30 investors in the United States.

The SEC’s complaint alleges that, from at least January 2016 to May 2019, Elliott, operating through Piptastic, falsely represented to investors that he would use their money for an overseas fund that purportedly engaged in a trading strategy known as “spread trading” or “spreadbet trading,” which involves speculating on the price movement of a security or other financial instrument.

According to the complaint, Elliott instead knowingly misused investor assets for his own personal benefit, as well as that of his wife, relief defendant Sharon Elliott, and others including his associate, relief defendant Paul Rose.

As further alleged, from at least 2019 through the present, when investors tried to redeem their money from Piptastic, Elliott lied about the status of the investments. In particular, he claimed that he had profited from spread betting and that the funds were safely held in trading accounts for the benefit of the investors. Elliott also allegedly provided fictitious account statements that purport to reflect the investors’ preserved assets.

The SEC’s complaint charges Elliott and Piptastic with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

In this action, the US regulator seeks permanent injunctive relief, civil penalties, and disgorgement with prejudgment interest.

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