SEC Charges Marat Likhtenstein with $4 Million Offering Fraud

The Securities and Exchange Commission (SEC) has filed charges against Marat Likhtenstein for an offering fraud scheme that defrauded at least 15 advisory clients out of more than $4.1 million. The SEC alleges that Likhtenstein, acting as an investment adviser, falsely represented lucrative investment opportunities to clients, many of whom were elderly and from the Russian-American Jewish community. Instead of investing the funds, he allegedly used approximately $940,000 for Ponzi-like payments to other investors and spent nearly $3.2 million on personal expenses. The complaint charges Likhtenstein with violations of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. He has consented to injunctive relief, with monetary relief, including disgorgement, prejudgment interest, and civil penalties, to be determined later. A parallel criminal action was also brought by the Kings County District Attorney’s Office.

This enforcement action signifies a significant regulatory action against an investment adviser for misappropriation of client funds and fraudulent misrepresentation. Regulated entities, particularly investment advisers, should review their internal controls and client communication practices to ensure compliance with securities laws and prevent similar fraudulent schemes. The SEC's pursuit of both civil and criminal actions, along with the consent to injunctive relief, underscores the severity of these allegations and the potential consequences of non-compliance, including financial penalties and conduct-based injunctions.