The Securities and Exchange Commission (SEC) has obtained a court order freezing the assets of an investment adviser that it has charged with secretly siphoning millions of dollars from accounts he managed for professional athletes and investing them in a struggling online sports and entertainment ticket business on whose board he served.
The SEC charged the adviser, Ash Narayan, along with The Ticket Reserve CEO Richard M. Harmon, and chief operating officer John Kaptrosky, after it was alleged that Narayan transferred more than $33 million from clients’ accounts to The Ticket Reserve without their knowledge or consent and often using forged or unauthorised signatures.
The Ticket Reserve made Ponzi-like payments to existing investors using money from new investors.
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The Ticket Reserve became dependent on the fraudulent cash infusions from Narayan to stay in business and in exchange, Narayan received nearly $2 million in hidden compensation from the company, most of it directly traceable to funds stolen from his clients.
The Ticket Reserve also made Ponzi-like payments to existing investors using money from new investors. After being fired from the investment firm where he worked and losing access to the clients’ accounts, Narayan is alleged to have redirected to the sham fees he received out of the money taken from client accounts to The Ticket Reserve.
The SEC’s complaint alleges that Narayan, The Ticket Reserve, Harmon, and Kaptrosky violated antifraud provisions of the federal securities laws and a related SEC antifraud rule and has charged them accordingly. The SEC is seeking re-payment of the fraudulent gains and preliminary and permanent injunctions.