SEC secures asset freeze order against Kinetic Investment Group

Maria Nikolova

The order is issued in connection with an alleged fraudulent, unregistered securities offering that raised approximately $39 million.

The United States Securities and Exchange Commission (SEC) today announces that it has secured an asset freeze and other emergency relief against Florida-based investment adviser Kinetic Investment Group LLC and its managing member, Michael Scott Williams.

On March 6, 2020, U.S. District Court Judge William F. Jung granted the SEC’s request for emergency relief, including an asset freeze and an order for records preservation, against Kinetic Group, Williams, and a number of entities enlisted as relief defendants. The court also granted the SEC’s request to appoint Mark Kornfeld as receiver over Kinetic Group and the relief defendants.

The order is issued in connection with an alleged fraudulent, unregistered securities offering that raised approximately $39 million from at least 30 investors located mostly in Florida and Puerto Rico.

According to the SEC’s complaint, filed in the U.S. District Court for the Middle District of Florida, Kinetic Group and Williams fraudulently raised millions of dollars by making material misrepresentations to investors who they solicited to invest in Kinetic Funds I LLC, a purported hedge fund that they managed. The complaint alleges that the defendants represented, among other things, that Kinetic Funds’ largest sub-fund invested solely in U.S.-listed financial products and that at least 90% of its portfolio was hedged using listed options. In reality, Williams invested a significant part of the sub-fund’s assets in a private start-up company owned by Williams.

The complaint further says that Williams misappropriated at least $6.3 million through undisclosed loans to himself and his entities.

The SEC’s complaint charges Kinetic Group and Williams with violating the antifraud provisions of the federal securities laws. Williams is also charged, in the alternative, with aiding and abetting Kinetic Group’s violations of the federal securities laws.

The regulator seeks injunctions, disgorgement of allegedly ill-gotten gains with pre-judgment interest, and financial penalties against the defendants.

Read this next

Retail FX

Lion launches multi-currency trading accounts powered by AI

The core advantages of multi-currency trading account services include enabling significant cost savings and higher efficiency for investors.

Inside View, Interviews

Interview: Stanislav Bunimovich on Finalto’s white label solution

To explore what makes Finalto’s white-label solutions stand out in such an incredibly competitive market, Finalto sat down with its Chief Operating Officer, Stanislav Bunimovich, for an interview. 

Digital Assets

Talos acquired Cloudwall for a better portfolio management system

Cloudwall’s additional expertise in portfolio risk systems further positions Talos at the forefront of portfolio management systems across spot, futures, perps, and options.

Digital Assets

Bybit’s Bitcoin market share explodes, up by 400%

“This milestone is a testament to our sharp trading products and the loyalty of our users. As the industry evolves, Bybit remains at the forefront, ready to set new standards in the crypto trading world.”

Crypto Insider

Why Self-Custody is the Key to Secure Crypto Trading

Crypto trading is fast gaining popularity; as of writing, the total market capitalization stands at $2.3 trillion, double what it was at the onset of the 2021 bull market.

Industry News

UK FCA sues Lee Steven Maggs for FX scam Kube Trading

‘Kube Trading’ allegedly received around £2.67 million for FX trading and concealed significant losses from investors.

Market News

AUD/USD Soars Following Inflation Report

Australia’s CPI surge hints at prolonged tight monetary policy. Watch the Aussie dollar as US economic data looms.

Institutional FX

GCEX reports drop in turnover in 2023 due to crypto winter

“The crypto winter had a huge impact across the industry, and GCEX was no exception. However, in response to the decline in revenue, we have been resilient and adaptive, navigating our costs effectively and diversifying revenue streams such as introducing staking services for institutional and professional clients.”

Institutional FX

FxGrow taps Integral’s SaaS brokerage workflow

“FxGrow’s decision to partner with us is indicative of the growing advantage for brokers to leverage tier-one institutional-grade technology while maintaining control over their own platform. Integral is well-positioned to provide the SaaS solutions that will enable these businesses to better compete in the market.”

<