SEC obtains asset freeze order against “lead trader” at helm of fraudulent investment firm
The “lead trader” addressed client concerns about high upfront fees by saying “U will make it in ur first month”.
The United States Securities and Exchange Commission (SEC) has managed to secure a court order to freeze assets and halt the activities of an ongoing investment fraud, spearheaded by a recidivist.
The scheme involves a company named 2waytrading, which offers stock trading tips and investment advice, with the focus of operations being on options trading. The self-proclaimed “lead trader” and operator of the fraudulent entity is Mohamud Abdi Ahmed, who had already been in jail for investment fraud but hid that fact from the clients of his new company.
2waytrading was set up shortly after Ahmed left jail in 2014 – he lured investors with promises of artificially high returns and claims he had an investing experience of 15 years. People who questioned the reasonability of the high upfront fees heard the following consolation: “U will make it in ur first month.”
The claims about high returns, safety of investments and Ahmed’s experience in investment were unfounded. Furthermore, Ahmed requested that his clients provide him with access to their online brokerage accounts by turning over their user IDs and passwords to him and fund those accounts with at least $30,000 so that he can then “trade” on their behalf.
Neither Ahmed, nor 2waytrading are in any way registered to provide investment services, the SEC noted in its Complaint.
On top of violating federal securities laws, Ahmed has also breached the terms of his provisional release.
Paul A. Magnuson, Senior Judge of the U.S. District Court, has issued a temporary restraining order that imposed the freeze on Ahmed’s and 2waytrading’s assets and prohibits them from making any investment decisions or accessing any brokerage accounts they do not own. The SEC is seeking financial penalties and disgorgement of ill-gotten gains as well as permanent injunctive relief.
SEC findings show that 2waytrading’s PayPal account has received over $125,000 in fees since its opening. In addition, 2waytrading maintains its own brokerage account in which it has conducted over $7 million notional value in securities trades since 2015.
