This past Friday, the Securities and Exchange Commission (SEC) revealed an enforcement action that was initially filed last October. According to the SEC, it received a temporary restraining order, an asset freeze, and other relief to halt an ongoing fraud targeting the Indian community that had raised nearly $130 million since April 2021.
On November 30, 2023, the SEC secured a preliminary injunction, the extension of the asset freeze, and other relief.
The SEC alleges that Nanban Ventures LLC, its founders, Gopala Krishnan, Manivannan Shanmugam, and Sakthivel Palani Gounder, and three other entities that the founders controlled raised more than $89 million from more than 350 investors for investments in purported venture capital funds and more than $39 million from 10 investors for investments directly in the three other entities.
The complaint alleges that the founders overstated the profitability of the investments and paid investors at least $17.8 million in fake profits that were actually Ponzi payments.
The SEC’s investigation is ongoing.
