Internet Offering Fraud: SEC Charges Group With Fraud for Bogus Fund that Didn’t Exist

The Securities and Exchange Commission (SEC) has charged the Archer Capital Management Group, Archer Growth Fund, and two related entities, HDR Management LLC and Silvermoon Group LLC, with an alleged fraudulent scheme that raised $2.6 million from at least 20 unsuspecting investors.

According to the SEC complaint, Archer promoted an internet offering fraud for the Fund that claimed an annual rate of return of 47%. In fact, the SEC claims the Fund did not exist.

The SEC further alleges that the funds raised were misappropriated and used for personal expenditures with any remaining funds transferred to foreign accounts.

The SEC complaint alleges that the defendants published false and misleading news articles that falsely claimed that the Archer Fund was one of four best-performing mutual funds, with an annual expense ratio of 0.0%. The SEC adds that the defendants also claimed that the Archer Fund was “one of the best-performing, privately-held mutual funds.”

The investment offering was said to have been disseminated via Archer Capital’s website and other internet outlets. The website featured stock images of six purported senior executives with links to their respective fictitious LinkedIn profiles.

On May 11, 2020, the Complaint alleges that the defendants issued a press release purportedly from the Archer Fund, with the content being published in several well-known digital publications.

The SEC’s complaint, filed in federal court in the Southern District of Florida, seeks permanent injunctions, disgorgement and prejudgment interest against the defendants.

 

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