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.

Read this next

Retail FX

FF Simple and Smart Trades says Goodbye to CySEC authorization

The Cyprus Securities and Exchange Commission (CySEC) confirmed that it has wholly withdrawn the Cyprus Investment Firm (CIF) licenses of FF Simple and Smart Trades Investment Services Ltd.

Crypto Insider

Shining the Light in Crypto’s Dark Places

Something changed in regulators’ minds after the November crash of the FTX crypto exchange.

Executive Moves

Financial Commission Adds Sam Low to Dispute Resolution Committee

The Financial Commission (FinaCom PLC), a dispute resolution service that caters to the financial services industry, has appointed Sam Low as the newest member of its Dispute Resolution Committee (DRC).

Digital Assets, Uncategorized

De-facto owner of Bithumb exchange arrested in South Korea

South Korean prosecutors have arrested Kang Jong-Hyun, the anonymous chairman and owner of the country’s largest cryptocurrency exchange, Bithumb, on charges of embezzlement and stock manipulation.

Retail FX

Interactive Brokers volumes snap three-month losing streak

Electronic brokerage firm Interactive Brokers LLC (NASDAQ:IBKR) said its trading volumes rose in January, an indication that investor confidence in the financial markets is rebounding after having been fairly mixed over the past few months.

Digital Assets

VVF invests $5 million in Everscale, a potential Layer 2 solution for Venom blockchain

“For us, this is a strategic investment aimed at the technological development of projects and teams around technologies that we focus on and actively develop. In particular, we are talking about the Venom blockchain project and its ecosystem, which is planned to be launched soon and for which Everscale is a potential Layer 2 solution.”

Institutional FX

FXSpotStream volume ends string of declines on January rebound

Trading volumes on institutional FX platforms surged in January as traders increased their bets on central bankers’ policy with evidence mounting that inflation and economic growth are both losing momentum.

Industry News

DeFi firm Aurox launches SEC-compliant crowdfunding campaign on tZERO

“This is a great opportunity for us to raise capital from our community and the broader public on a leading fully regulated platform. We are confident that the tZERO Markets platform will provide us with the exposure and reach we need to attract a diverse investors to support our business growth.”

Industry News

Morgan Stanley launches ETF platform with six ESG-focused products by Calvert

“These new ETFs will resonate strongly with investors who seek competitive investment results while promoting positive change and supporting companies that are leaders in improving long-term shareholder value and societal outcomes.”

<