SEC updates on action targeting co-conspirator of Ponzi scammer Renwick Haddow
With regard to the SEC’s action, Savraj Gata-Aura and Core Agents have agreed in principle to bifurcated settlements that would resolve all the non-monetary relief the Commission has sought in this matter.
The United States Securities and Exchange Commission (SEC) has earlier today filed a letter with the New York Southern District Court, providing an update on the action targeting Savraj Gata-Aura, a co-conspirator of Ponzi scammer Renwick Haddow, and Core Agents Ltd.
In the letter, seen by FinanceFeeds, the Commission says it takes no position as to whether the stay of the civil case should be lifted, whereas the defendants seek to have the stay continued. In any event, the Commission and the defendants have agreed in principle to bifurcated settlements, and the parties do not anticipate that discovery will be necessary.
The United States Attorney’s Office for the Southern District of New York originally sought the existing stay because of a related criminal proceeding. On January 7, 2020, Gata-Aura pleaded guilty to one count of conspiracy to commit wire fraud in the Criminal Case. Sentencing is currently scheduled for March 18, 2020. The USAO has informed the Commission that the USAO takes no position on whether the stay should be lifted.
With regard to this civil action, the defendants have agreed in principle to bifurcated settlements that would resolve all the non-monetary relief the SEC has sought in the civil matter. If approved by the Court, the partial consent judgments would leave the monetary relief to be decided by later motion or further settlement after Gata-Aura’s sentencing in the criminal case.
Let’s recall that, in May 2019, Geoffrey S. Berman, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., the Assistant Director-in-Charge of the New York Office of the Federal Bureau of Investigation (FBI), announced the unsealing of an Indictment charging Gata-Aura with wire fraud and conspiracy to commit wire fraud for engaging in a scheme to defraud victims by making material misrepresentations about the management and operations of a company called Bar Works Inc. and related entities.
Bar Works, Inc. and Bar Works 7th Avenue, Inc. were ostensibly start-up companies that would take vacant restaurants and bars and convert them into cooperative working spaces that could be leased by individuals or companies. In order to finance these activities, Bar Works raised money from investors pursuant to leases that guaranteed investors a fixed rate of return. In reality, Bar Works was an offering fraud run by Renwick Haddow, whose prior regulatory history with the United Kingdom Financial Conduct Authority (FCA), if revealed, would have compromised the ability of Bar Works to raise funds. Haddow created a fictional alter-ego “Jonathan Black” to be the face of Bar Works.
The SEC’s Complaint alleges that between September 2015 and June 2017, Gata-Aura and his company Core Agents Ltd. operated a network of sales agents who sold investments in Bar Works to individuals around the world. The complaint further alleges that Gata-Aura knew that Jonathan Black was a fiction, knew that Haddow ran Bar Works, and knew that Bar Works’ offering documents were materially false and misleading. The defendants are alleged to have raised over $10 million for the Bar Works fraud, and received over $2.9 million for their efforts.
The defendants have been charged in the civil matter with aiding and abetting the fraud conducted by Haddow and Bar Works.
In addition to injunctive relief, the SEC seeks disgorgement, on a joint and several basis, of approximately $2.9 million. The regulator reserves the right to seek to increase this amount of this claim if discovery reveals that the defendants obtained more than this amount pursuant to the Bar Works fraud.