SEC Charges New York Advisor With Running Investment Club Ponzi Scheme

First the notes each contained "exceptionally high rates of return, from 20% interest every 60 days to as high as 40% interest every 60 days," the complaint said. The notes also lacked maturity dates, instead indicating they were to be repaid "upon dissolution" or within 30 days of the investor's "request to exit the group," and they all also stated the purpose of the investment group was to invest the assets of the group in stocks, other securities, digital currencies, and commercial and residential rental property, according to the complaint.

From at least March 2017, Pierre allegedly raised more than $2 million from at least 100 investors, mainly Haitian New Yorkers, who bought the high-yield promissory notes through Amongst Friends, the SEC said. Despite Pierre's promise of unrealistically high rates of return, the complaint alleged he incurred heavy losses trading securities and hid them by using new investor funds to pay older investors and issuing false account statements showing investment gains.

Pierre allegedly further financed the fraud by using money he embezzled from a former employer to make interest payments to investors, the SEC said. Its complaint also claimed Pierre fraudulently raised at least $375,000 from more than 15 investors related to a scheme involving the sale of partnership interests in a fast food chain.

Pierre's Amongst Friends investment opportunity was "built on a foundation of lies and deceit," according to Marc P. Berger, director of the SEC's New York Regional Office. "Investors should be wary of investments promising rates of return that seem too good to be true, and are encouraged to ask questions and check on their investment professional's background at http://www.Investor.gov," he said in a statement.

— Check out Woodbridge CEO Gets 25-Year Sentence for Fraud on ThinkAdvisor.